Coinbase Global Inc. (COIN), Kalshi and Kraken parent Payward are backing the Commodity Futures Trading Commission (CFTC) in a legal battle over whether U.S. exchanges can offer single-stock perpetual futures.
The firms, alongside DRW Holdings, Jump Trading and Paradigm, requested federal court permission to file an amicus brief defending the CFTC's authority to regulate the products.
The dispute follows a lawsuit filed last week by the Capital Markets Alliance (CMA), whose members include Cboe and Citadel Securities.
CMA wants to overturn the CFTC's approval of equity perpetual futures, arguing that contracts without expiration dates should qualify as security-based swaps rather than futures.
That classification would place them under a different regulatory framework and prevent their listing as futures on CFTC-regulated exchanges.
Although, the crypto firms argue that the SEC participated in the regulatory process from the beginning.
"The agencies jointly sought public comment on whether perpetual contracts should be classified as security futures," the filing stated.
Coinbase General Counsel Molly Abraham argued that Congress established a framework in the year 2000 distinguishing security futures from swaps.
What Does This Mean For U.S. Traders?
Coinbase, Kalshi and Payward submitted applications to list perpetual futures tied to U.S. stocks, which were deemed approved on Nov. 2, the filing said.
Unlike traditional futures, perpetual contracts have no expiration date, allowing traders to maintain exposure to stock price movements without owning the underlying shares.
Coinbase Vice Chairman Ryan VanGrack argued that U.S. investors should have access to products already trading in global markets under the strong consumer protections and joint oversight of the CFTC and SEC
The lawsuit now puts the future of U.S.-listed stock perpetual futures in question.
