Hyperliquid Policy Center backs CFTC as CME fights U.S. perpetual futures approval

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CME challenges CFTC on futures

Highlights

CME sued the CFTC in June to block U.S. approval of perpetual futures, claiming direct competition threatens its existing derivatives business.
Hyperliquid Policy Center filed an amicus brief supporting the CFTC, arguing CME's legal stance would deter innovation and favor incumbents in futures markets.
The CFTC's approval last month of perpetual futures for Kalshi and Coinbase enables such products to be traded in the U.S. for the first time, expanding the market.

Court filing targets CME challenge

As first reported by The Block, Hyperliquid Policy Center filed an amicus brief on Thursday in the U.S. District Court for the District of Columbia in support of the CFTC after CME sued the agency in June over its decision to allow perpetual futures to trade in the U.S.

HPC, represented by former U.S. Solicitor General Elizabeth Prelogar, argues that CME is trying to use a new theory of legal standing under which an incumbent exchange can claim harm whenever regulators permit a product it does not offer. Prelogar says such an outcome would encourage established players to litigate against new approvals and would slow innovation in the futures market.

CME, the world’s largest derivatives marketplace, argues in its complaint that perpetual futures would compete directly with its own products and cause injury to the exchange. Chief Executive Terrence Duffy has also criticized perpetual futures publicly, calling them a "disaster waiting to happen" and arguing they should be treated as swaps under the Dodd-Frank Act.

Perpetual futures debate widens in crypto markets

Perpetual futures are contracts without an expiration date that let traders bet on price movements without holding the underlying asset. The products have become especially popular in crypto derivatives trading, including on decentralized exchange Hyperliquid.

The CFTC approved the first perpetual futures for Kalshi and Coinbase last month, opening the way for such products to trade in the U.S. for the first time. HPC says that decision expands the market rather than redistributing existing demand, adding that Kalshi is not a new entrant because it has been a CFTC-regulated exchange since 2020.

In its filing, HPC contends that CME lacks standing to claim competitive injury from the regulator’s order. It says the approval brings in market participants who would not have traded dated futures contracts, strengthening its argument that the case carries broader implications for how the U.S. futures sector handles new product launches.

Our earlier coverage focused on the intensifying lobbying fight around the Senate’s Clarity Act ahead of a key procedural vote, with crypto advocates and banking groups taking their campaigns into senators’ home states during the recess. We noted the industry’s push for clearer rules on token classifications and regulator jurisdiction, while opponents warned about weaker safeguards and stablecoin provisions that could pressure bank deposits and lending.

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