Stock Perps Court Fight: Crypto Firms Say the CFTC Got It Right

A legal fight over stock linked perpetual futures got a new voice on Monday night. Coinbase, Kraken, Kalshi, Paradigm, DRW Holdings and Jump Trading filed a brief in federal court in Manhattan, urging judges to leave the CFTC’s green light in place. Their core claim is simple: these contracts are security futures, not swaps, and both the CFTC and the SEC have handled them that way. In their words, the real question is not whether the products look like swaps but whether they qualify as security futures.

The Capital Markets Alliance Lawsuit

The challenge comes from the Capital Markets Alliance, a newly formed group backed by Citadel Securities, Cboe and other traditional market players. It asked for an emergency halt, arguing that perps with no expiration date are security based swaps that fall under SEC control. A federal judge let trading continue for now, but hinted that the group’s complaint about CFTC overreach may have merit, which keeps the outcome uncertain.

Industry Argument: Perps Are a Better Product

The crypto side also turned the argument around. It says stock perps beat traditional stock futures, and that the alliance’s own members could build the same product instead of heading to court to keep it off the market. The filers added that the SEC took part in the process and was not sidestepped.

Bigger Push to Bring Perps Onshore

Regulators under President Trump have been told to pull the booming overseas perps business into the US. The CFTC already did this for crypto perps, though CME Group is fighting that move in court on similar grounds, saying such products should count as swaps instead of futures.