CME CEO Says Exchange Will Sue CFTC Over Approval of Bitcoin Perpetual Futures

CME Group, operator of the largest derivatives exchange in the US, plans to sue the Commodity Futures Trading Commission over the regulator’s approval of perpetual futures.

Terry Duffy, CME’s chief executive officer, told CNBC’s Fast Money on June 17 that the company plans to file suit against the CFTC. The complaint is due to be filed on June 19.

The CFTC approved prediction-market platform Kalshi’s Bitcoin perpetual futures product in May. Perpetual futures are derivatives that track the price of an underlying asset without an expiration date, and the approval marked the first such case in the US. Kalshi has since expanded the lineup to other cryptocurrencies.

Duffy argued that perpetual futures should be classified as swaps, not futures. Under the Dodd-Frank Act, they should be treated as swaps, and that will form the core of the lawsuit, he said.

He added that CME has exclusive licensing agreements with all benchmark providers. If those products are classified as swaps, they would ultimately have to be listed through CME’s system.

The lawsuit signals a deepening conflict between the CFTC and the traditional derivatives industry. CFTC Chairman Michael Selig recently said on the same program that the time had come to approve regulated futures products without expiration dates and offer them in the US under appropriate oversight.

Duffy is set to step down in March next year. He said he has discussed the issue with the board over the past eight months and is ready to take on the fight.