CFTC Seeks Dismissal of CME Challenge to Kalshi Bitcoin Contract

The Commodity Futures Trading Commission (CFTC) is seeking dismissal of Chicago Mercantile Exchange Inc. (CME)’s challenge to a Kalshi Bitcoin (BTC) contract, leaving a broader dispute over U.S. perpetual-futures rules unresolved.

The CFTC filed a reply supporting its motion to dismiss on Oct. 16. In its Sept. 2 motion, the agency argued CME had not shown the approval caused competitive harm that would give it grounds to sue. The court has not ruled on whether CME can bring the case or how perpetuals should be classified.

CME sued on June 18 after the CFTC approved KalshiEX LLC’s BTCPERP contract as a future on May 29. The cash-settled contract tracks BTC’s spot price and has no fixed expiration date. Long and short holders exchange periodic payments intended to keep the contract price near Bitcoin’s spot price.

CME argues contracts without fixed expiration dates should be treated as swaps and face the requirements that apply to swaps. It asked the court to overturn the approval and the CFTC’s accompanying policy statement.

In prepared remarks for CME Group Inc.’s July 22 earnings call, Chairman and CEO Terrence Duffy said, “However, we have not heard demand from our customers for these products.” He said perpetuals do not perform the hedging role served by products used by CME’s main institutional clients. The CFTC’s Sept. 2 motion cited those remarks.

The order extends its reasoning to comparable perpetuals linked to digital commodities with deep, continuous spot markets. A separate policy statement says contracts tied to other asset classes should be submitted for case-by-case review, while stating that it creates no binding obligation.