Better Markets Joins Bid to Block U.S. Single-Stock Perpetual Futures

Better Markets and two former SEC officials are backing a request for a federal court order blocking perpetual futures tied to individual U.S. stocks, arguing the contracts fall under securities regulation.

On Nov. 10, Better Markets asked a judge to accept a friend-of-the-court brief supporting the Capital Markets Alliance Association’s request for a preliminary injunction against the Commodity Futures Trading Commission. The alliance argues the products are security-based swaps overseen by the SEC, rather than futures under the CFTC’s authority.

Allison Herren Lee, a former acting SEC chair and commissioner, and John C. Coates, a Harvard Law School professor and former SEC general counsel, joined the brief.

Perpetual futures are leveraged derivatives with no set expiration date, allowing a contract to remain open indefinitely. The dispute centers on whether contracts tied to individual stocks fall under the CFTC’s futures authority or the SEC’s rules for security-based swaps.

Applications from Coinbase, Kalshi and Bitnomial to offer single-stock perpetuals were deemed approved by the CFTC on Nov. 2 after the agency’s review period expired. The Capital Markets Alliance Association is challenging the CFTC in federal court in New York.

The judge previously denied the alliance’s request for an emergency halt, while leaving the case’s merits unresolved. The SEC has also filed a separate brief backing the CFTC’s approval, but has not taken a position on whether the contracts are futures or swaps. The SEC faces a Dec. 31 deadline to decide whether to overturn the exchanges’ rules.

Better Markets Legal Director Dominick Freda said the CFTC was “attempting to gut 90 years of investor protections on behalf of Kalshi, Coinbase and others.” Freda argued the contracts are securities swaps that belong under SEC rules. The briefs put current SEC leadership and two former senior officials on opposite sides of the case.