Coinbase, Kalshi, Kraken parent Payward and three other firms want to defend the CFTC's authority over single-stock perpetual futures in court. Their filing answers a lawsuit from the Capital Markets Alliance, which seeks to overturn the agency's approval of the products.
Coinbase, Kalshi, Kraken parent Payward, DRW Holdings, Jump Trading and Paradigm have moved for leave to file an amicus brief supporting the Commodity Futures Trading Commission, according to a Monday court filing. The brief defends the CFTC's authority to regulate single-stock perpetual futures in the U.S.
A lawsuit aims to overturn the approvals
The brief responds to a lawsuit the Capital Markets Alliance (CMA) filed last week, seeking to overturn the CFTC's approval of the products. The CMA is an industry association with members including Cboe and Citadel Securities.
According to the Monday filing, Coinbase, Kalshi and Payward submitted applications with the CFTC to list equity perps tied to U.S. stocks. The applications were deemed approved on Nov. 2.
Futures or security-based swaps
The CMA argues that equity perps do not expire on a set date, so they should be treated as "security-based swaps" rather than futures. Under that view, they cannot be listed on CFTC-regulated exchanges. The association also claimed the CFTC overstepped the Securities and Exchange Commission's authority.
However, the crypto firms pushed back. They said the SEC was "at the table from the very start" of the regulatory process, according to the Monday filing. The filing added that the agencies jointly sought public comment on whether perpetual contracts should be classified as security futures.
Coinbase General Counsel Molly Abraham wrote on X that under the Commodity Exchange Act and the securities futures framework Congress established in 2000, security futures products are not swaps. Coinbase Vice Chairman Ryan VanGrack separately said global markets already trade equity perps.
A decision upholding the approvals would help preserve the path for these firms to offer or expand the products onshore.
Source: The Block
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