CFTC Clears Stock Perps, and Cboe and Citadel Sue the Same Day

On November 3, the US regulator CFTC allowed exchanges to launch perpetual futures on individual stocks for the first time. A product that grew up in crypto is now officially entering equities. The same day, a coalition that includes Cboe and Citadel Securities filed a lawsuit to overturn the decision.

For now this is a permission with no contract actually trading. CFTC Chairman Michael Selig named no exchanges and gave no launch dates.

What exactly the CFTC approved

Perpetual futures, or perps, let traders bet on an asset's price without owning it and without a contract expiry date. BitMEX popularized them in 2016. Since then perps have become a core product on offshore venues like Binance.

According to Selig, the contracts are deemed approved under CFTC Regulation 40.3. They can be offered by exchanges registered with both the CFTC and the SEC to trade security futures products. The chairman was blunt about the motive: US traders should not be "forced to turn to offshore, and often unregulated, venues."

From Bitcoin to stocks in six months

In May the CFTC approved Bitcoin perps for Kalshi, and Coinbase got relief to offer some crypto perps listed on an affiliated foreign exchange. On August 19, Donald Trump said the regulator was working to bring the decentralized exchange Hyperliquid to the US in a fully compliant and legal way.

In September, Coinbase, Kalshi and Payward (Kraken's parent company) via its Bitnomial exchange filed for perps on individual US stocks. OG.com joined days later with contracts that would trade around the clock on weekdays. From the first Bitcoin perp to the stock decision, six months passed.

94% of Robinhood users are ready to trade

Demand was measured before the decision. A Mizuho survey of more than 600 Robinhood users found that 94% would trade single-stock perpetual futures, mostly with new money. The bank's analysts called such a product a "strong positive" for HOOD shares. The sample is small and made up of already active customers, so 94% does not equal demand across the whole market.

Crypto reacts faster than traditional markets. On October 29, NYSE owner ICE announced a partnership with Trade[XYZ] and an investment in it to launch regulated Hyperliquid-based perps in the US. The HYPE token rose about 15% and now trades near $84.

Cboe and Citadel versus the CFTC

The Capital Markets Alliance, which includes Cboe, Citadel Securities and Healthy Markets, sued on the day of the decision. The coalition argues the contracts are security-based swaps and therefore fall under SEC jurisdiction. It also says the CFTC broke the Administrative Procedure Act by explaining its decision poorly and ignoring the impact on investors. The plaintiffs also want to stop the approval from taking effect while the case runs.

This is already the second such fight. In June the Chicago Mercantile Exchange challenged the approval of crypto perps, calling them swaps rather than futures. The difference is costly, since swaps face stricter reporting, margin and registration rules. In September the CFTC asked for the case to be dismissed because CME showed no financial harm and could list similar contracts itself.

Three scenarios for stock perps

The whole wave of filings depends on the court. There are three realistic outcomes.

• The court grants the coalition's request and suspends the approval, so launches slip by months.
• The court refuses, and the first exchanges, for example Coinbase or a Hyperliquid-based venue, announce start dates.
• A drawn-out case: exchanges decide for themselves whether to risk a launch under the threat of reversal.

The bottom line in numbers

In six months perps went from a single Bitcoin contract to permission for individual stocks, and two lawsuits now challenge the decision. 94% of surveyed Robinhood users are ready to trade the new product, but without dates and exchange names that is only potential. The first listings and early court rulings will show the real picture. Forecasting is risky here, because the CFTC and SEC dispute over jurisdiction may outlast the launch itself.