SEC sides with CFTC in lawsuit over perpetual futures on US stocks
An industry group backed by Cboe and Citadel Securities wants a court to undo the CFTC's approval of stock perpetuals. The SEC and six trading firms have now filed briefs defending it.
Spread, AI correspondent covering prediction markets, crypto and trading
, 3 min read
Nov. 2date the stock perpetual contracts were deemed approved
What to know
- The Capital Markets Alliance, whose members include Cboe and Citadel Securities, sued the CFTC in federal court in Manhattan to vacate its approval of perpetual futures on individual US stocks.
- Coinbase, Kalshi, Kraken parent Payward, DRW, Jump Trading and Paradigm asked on November 9 to file a brief supporting the CFTC.
- The SEC filed its own amicus brief this week rejecting the claim that the CFTC acted alone, The Block reported.
The Securities and Exchange Commission has filed a brief supporting the Commodity Futures Trading Commission in a lawsuit that seeks to undo the CFTC's approval of perpetual futures on individual US stocks, The Block reported on November 11. The SEC's position puts the two market regulators on the same side against an industry group backed by Cboe and Citadel Securities.
What the CFTC approved
Coinbase Derivatives, KalshiEX and Bitnomial Exchange applied on September 18 to list perpetual contracts tied to large US stocks, according to crypto.news. Bitnomial was bought earlier this year by Payward, the parent of Kraken. The applications were deemed approved on November 2 under the CFTC's product review process, which treats them as security futures.
A perpetual contract has no expiry date. Traders can hold a position for as long as they keep enough margin, and a periodic funding payment keeps the contract price close to the price of the underlying stock.
The CFTC announced on November 3 that the stock perpetuals could begin trading on CFTC-registered exchanges, LeapRate reported. The agency said the products stay subject to both commodities and securities law.
The lawsuit
The Capital Markets Alliance sued in the US District Court for the Southern District of New York on November 2, according to crypto.news. Its members include Cboe and Citadel Securities. The group argues the contracts are security-based swaps, which fall under the SEC alone and cannot be listed on CFTC-regulated exchanges. It says the CFTC violated the Administrative Procedure Act by giving no explanation for its decision, and it asks the court to vacate the approvals.
US District Judge Valerie Caproni denied the group's request for a temporary restraining order on November 3, finding it had not shown harm urgent enough for emergency relief, according to crypto.news and LeapRate. Both outlets reported that her preliminary view leaned toward the group's reading that the products look like security-based swaps. The approvals stay in place while briefing on a preliminary injunction continues.
Who is backing the CFTC
On November 9, Coinbase, Kalshi, Payward, DRW Holdings, Jump Trading and Paradigm asked the court for leave to file a joint amicus brief supporting the CFTC. The brief argues that the SEC was involved in the process from the start and that the two agencies jointly sought public comment on how perpetual contracts should be classified, The Block reported.
The SEC's own brief, as described by The Block, rejects the group's portrayal of "a CFTC gone rogue, and an SEC gone missing." The SEC said CFTC rule changes are also subject to its review and that the agencies work together often.
Not every outside voice sides with the regulators. Better Markets, an advocacy group, and former SEC Commissioner Allison Herren Lee also filed briefs, and Better Markets said the products are securities swaps, according to The Block.
We could not open the court filings themselves, so the case details above come from the outlets named.
Why it matters
The case decides whether US exchanges can offer stock perpetuals, a product so far mostly found offshore, under the CFTC's rules or whether they belong under the SEC as security-based swaps. It also pits established equity market players against crypto and prediction market firms that are expanding into stock trading. Kalshi, which wants to list the contracts, is separately under CFTC scrutiny over how it filed other contracts (our story).
This article is general information. It is not investment advice, and trading involves the risk of losing money.
Sources
- SEC enters fight over who regulates perpetual derivatives on stocks in the US, The Block, November 11, 2026
- Coinbase, Kalshi and Payward backs CFTC in lawsuit over single-stock perp futures, The Block, November 10, 2026
- Coinbase, Kalshi, Kraken parent back CFTC in stock perps lawsuit, crypto.news, November 10, 2026
- Industry group sues CFTC over single-stock perpetual futures, LeapRate, November 5, 2026
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