CME Group filed a lawsuit against the Commodity Futures Trading Commission to block Kalshi from listing perpetual futures, known as perps, in the United States. The exchange argues that the CFTC misclassified Kalshi’s contracts as futures instead of swaps, sidestepping regulations designed to curb the systemic risk of unregulated swaps. CME seeks to protect its market dominance.

Kalshi’s approval came after the CFTC greenlit its plan to list perps, a derivative that never expires and trades 24/7. Since launch, Kalshi has reported more than $5 billion in perp volumes, attracting traders who use leverage to amplify gains and losses. The move threatens to erode CME’s 9% share decline following the decision.

CME argues that classifying perps as futures removes them from swap‑dealer capital and margin rules set by Dodd‑Frank. By treating them as swaps, the CFTC would allow Kalshi to avoid the strict regulatory requirements intended to shield the economy from the “special dangers” of unregulated swaps. CFTC faces heavy scrutiny as a result.

The lawsuit signals a broader clash over the regulation of new financial products that blur traditional categories. If the court sides with CME, Kalshi could be barred from offering perps, restoring the CFTC’s previous stance that such contracts fall under swap regulations. CME’s action may prompt a rethink of how emerging derivatives fit within existing law.