CFTC Asks Court to Dismiss CME Lawsuit Over Kalshi Bitcoin Futures

The U.S. Commodity Futures Trading Commission has asked a federal court to dismiss CME Group's lawsuit over the agency's approval of crypto perpetual futures. In a motion filed September 2 with the U.S. District Court for the District of Columbia, the regulator called CME's claims "much ado about nothing" and said the exchange failed to show real financial harm.

What the CFTC is asking for

In the Wednesday filing, the CFTC asks the judge to dismiss the case CME brought against the approval of Kalshi's bitcoin perpetual futures contract. Perpetual futures have no expiration date and are popular in crypto trading because of high leverage, so their legal status in the U.S. had long gone unresolved. For traders, whether a contract counts as a future or a swap sets different margin, broker, and reporting requirements, so the classification carries practical weight beyond the legal fight. The regulator argues CME lacks standing to sue because it has not shown a concrete injury. According to the commission, the order CME is challenging lets any registered contract market, including CME itself, trade similar products in the derivatives market. CME has also publicly said its own customers were not asking for perpetual futures, so any lost opportunity, in the CFTC's view, is the exchange's own doing rather than the regulator's. This is shaping up as the first major test of how legacy exchanges respond to new competitors entering crypto derivatives after May's CFTC order. The regulator published the motion to dismiss filed on September 2, 2026 and asked for an oral hearing.

How the lawsuit started

The dispute began June 18, when CME sued the CFTC over a May 29 order. That order let Kalshi launch a bitcoin perpetual futures contract and cleared other registered markets to offer similar products as futures rather than swaps. Kalshi had long positioned itself as a prediction market platform rather than a traditional commodity exchange, so the CFTC's approval effectively opened a path into a segment long dominated by CME and a handful of other registered markets. CME argues these contracts fit the legal definition of a swap under the Commodity Exchange Act and Dodd-Frank. In its complaint, the exchange states that such contracts have historically traded only as swaps, so the May order, in its view, changes the rules without proper public process.

"In short, by authorizing Kalshi and others to enter the derivatives marketplace by listing similar cryptocurrency perpetuals as futures, the CFTC ushered new entrants into CME's retail futures market that seek to compete with CME for retail customers."

- CME Group, from its complaint filed with the U.S. District Court for the District of Columbia, June 18, 2026

The regulator's case

To have standing in federal court, a plaintiff must show concrete harm, not a hypothetical one. That is the ground the CFTC builds its defense on:

• CME can list the same contracts itself as a registered market, so there is no competitive injury.
• CME's monthly bitcoin and ether futures volumes in June and August exceeded May levels, the month the disputed order was issued.
• Reclassifying the contracts as swaps would not remove the competition, since Kalshi could simply offer them under the new label.
• Regulatory and tax differences between futures and swaps are too small to support CME's claim.

The commission added that Congress built the Commodity Exchange Act around responsible innovation and fair competition among exchanges. CME's attempt to limit a rival, the regulator argues, runs against that very purpose. CFTC lawyers also noted that CME's complaint never explains why classifying the contracts as futures rather than swaps causes the company concrete harm.

What happens next

CME must respond to the motion by October 2, and the CFTC has already asked for an oral hearing. CME representatives have not yet responded to reporters' requests for comment. In parallel, several other legal battles are unfolding around U.S. prediction markets. A Michigan court barred Kalshi's sports contracts, and New Jersey has asked the Supreme Court to settle who regulates such products. Kalshi also lost a separate round in Nevada, where the Ninth Circuit upheld limits on the company's sports contracts and cast doubt on the CFTC's claim of exclusive jurisdiction over such products. The U.S. crypto derivatives market has drawn interest from other players too. This summer, Hyperliquid discussed launching similar products through an exchange partner. If the judge sides with the CFTC, Kalshi's bitcoin futures will keep trading unchanged, and CME will either have to launch its own competing contracts or cede the niche to rivals.