A group of trading firms including Coinbase and Kalshi requested court permission on Nov 10 to file a legal brief supporting the Commodity Futures Trading Commission’s power to regulate perpetual futures on individual stocks. The coalition, which includes Payward, DRW Holdings, Jump Trading and Paradigm, argues that these no-expiry contracts are categorized as security futures under a framework established by Congress in 2000. The firms maintain that this classification means the contracts are not “swaps” and are therefore subject to joint oversight by the CFTC and the SEC.
The legal intervention comes as the CFTC fights a lawsuit from the Capital Markets Alliance, a group backed by Citadel Securities and Cboe, which claims the products fall solely under the jurisdiction of the SEC. While a federal judge previously allowed the contracts to continue trading—enabling Kalshi to report more than $300M in initial volume following its Nov 5 launch—the court noted that the challenge to the agency’s authority to approve the instruments is likely to succeed on the merits.