Perpetual Crypto Futures Enter U.S.; CME Sues CFTC

On May 29 the Commodity Futures Trading Commission approved KalshiEX’s BTCPERP as a futures contract referencing Bitcoin’s spot price and issued a policy statement inviting similar products. On June 12 the agency gave designated contract markets a conditional route to convert long-dated, expiry-bearing contracts into no-expiry perpetuals. On June 18 CME Group filed suit in federal court in Washington, D.C., seeking to vacate the Kalshi order and the related policy statement.

Perpetual futures are contracts without a settlement date. To keep contract prices close to the underlying spot market, exchanges use recurring funding payments between long and short holders. When the contract trades above spot, long holders typically pay shorts; when it trades below spot, shorts typically pay longs. Perpetuals also commonly offer embedded leverage and include automatic liquidations when margin falls below maintenance levels.

Two different contract designs are operating in the U.S. Kalshi’s BTCPERP is structured as a true no-expiry perpetual. Coinbase’s product is issued as a long-dated futures contract with a five-year expiry and an hourly funding rate that settles twice daily; that design maintains existing futures rules while producing price behavior similar to a perpetual. The CFTC’s conversion route allows exchanges to begin with long-dated contracts and later remove expirations.

Market structure changes with perpetuals concentrate liquidity into a single continuous contract rather than a ladder of dated expirations. Concentrated liquidity deepens order books but places more market influence on one funding rate and one liquidation mechanism. Large leveraged positions can trigger liquidations that create immediate sell or buy pressure and can move prices quickly. For years, most perpetual activity occurred on offshore venues; U.S. listings create a domestic funding curve and a new onshore source of price signals.

Commercial responses have varied. CME’s complaint states Kalshi has self-certified more than a dozen crypto perpetuals and that trading in them has exceeded $1 billion. Kalshi has listed perps for tokens beyond Bitcoin, including Ether and XRP. Coinbase is offering perpetual-style contracts on its regulated derivatives platform and opened a channel for U.S. clients to access global liquidity. CME moved its dated crypto futures and options to 24/7 trading.

Regulatory and clearing differences remain. Contract terms, clearing arrangements, collateral rules and reference prices differ across venues and can fragment liquidity and limit cross-margining. Coinbase Derivatives and clearinghouse Nodal Clear have proposed accepting Circle’s USDC as margin, with Coinbase Custody Trust holding the stablecoin; that plan is pending CFTC approval.

The legal dispute turns on whether perpetuals meet the Commodity Exchange Act’s definition of a swap or qualify as futures. CME argued perpetuals should be regulated as swaps with dealer registration, capital and reporting requirements. The CFTC called the lawsuit frivolous and has sought dismissal. No court ruling has been issued.