CFTC Seeks Dismissal of CME’s Kalshi Bitcoin Futures Lawsuit

• The CFTC says that CME is unable to prove competitive injury from Kalshi’s Bitcoin perpetual futures.
• The case may impact how regulators in the United States regulate crypto perpetuals.

The Commodity Futures Trading Commission (CFTC)is seeking a dismissal of the lawsuit filed by CME Group against Kalshi’s Bitcoin perpetual futures in a federal court. The Commission asserts that CME does not have standing because the Commission has failed to demonstrate any actual competitive injury caused by its approval of the contract. Furthermore, the document rejects CME’s contention that Kalshi’s perpetual futures are a swap under the Commodity Exchange Act.

CFTC Defies CME Over Competition Concerns

In a 30-page dismissal filing, the CFTC submitted its motion in federal court in Washington, D.C., on September 2. CFTC described CME’s action as “much ado about nothing.” In doing so, the CFTC is defying CME’s core reasons for initiating the lawsuit. CME has not alleged that the CFTC doesn’t have jurisdiction over trading in perpetual futures. Also, it has not claimed that the CFTC did not have the power to give regulatory nod to the contract.

The CFTC believes that CME cannot prove any concrete financial harm from the approval. CME had claimed earlier that Kalshi’s product may become a competitive threat to retail traders. However, the CFTC highlights that CME admitted that there was no demand from its clients for the perpetual futures. CFTC also highlighted that CME’s cryptocurrency futures trading has grown after the approval.