Coinbase, Kalshi, Kraken parent seek to back CFTC in stock perps fight

On the 9th of November, Coinbase, Kalshi, Kraken’s parent Payward, DRW Holdings, Jump Trading and Paradigm asked a federal judge to let them file a brief backing the CFTC.

What’s the fight about? The Capital Markets Alliance Association (CMAA) sued to undo the CFTC’s approval of single-stock perpetual futures.

These six companies think the CFTC got it right.

In the brief (shared by Coinbase’s legal representative Molly Abraham), they argue these products already fit under existing US futures laws. Thing is, the judge isn’t leaning their way so far.

Just days earlier, the court said the CFTC likely “exceeded its statutory authority” by letting these contracts trade as security futures.

So they’re jumping in while they’re behind.

It all comes down to one detail

Last week, the CFTC said stock perps could trade on US-regulated exchanges for the first time. Days later, the CMAA sued. This is a new trade group, and its members include Cboe and Citadel Securities.

The argument being made is that a contract with no end date isn’t a future. It’s a security-based swap, which puts it mainly under the SEC. It would also have to come with stricter limits on retail trading.

Not everyone agrees. Per Coinbase and team, nothing says a security future has to expire. This would keep these contracts under shared CFTC and SEC watch.

Judge Valerie Caproni is leaning toward the trade group for now. She said these look more like swaps. But she didn’t stop trading, since the group couldn’t show it faced urgent, lasting harm.

So stock perps stay live, for now. The trade group’s next filing is due on the 10th.

Final Summary

• Coinbase, Kalshi and four other firms want to back the CFTC in a lawsuit over single-stock perpetual futures.
• A judge said the CFTC likely overstepped.