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Recent actions by the Commodity Futures Trading Commission (CFTC) and the US Securities and Exchange Commission (SEC) have notably altered the regulatory landscape for perpetual contracts (Perpetuals) while simultaneously creating substantial uncertainty regarding their long-term treatment under US law.
The CFTC took a series of actions indicating that certain Perpetuals referencing digital commodities may be accommodated within existing futures market frameworks.1 Those developments were quickly followed by a legal challenge from the Chicago Mercantile Exchange (CME) and a joint SEC-CFTC request for comment addressing the treatment of Perpetuals and other derivatives products under federal securities and commodities laws.2
Taken together, these developments represent the most significant regulatory activity affecting Perpetuals to date and suggest that the legal framework governing such products may continue to evolve in the coming months.
In Depth
The CFTC’s latest actions
On May 29, 2026, the CFTC issued three significant actions affecting Perpetuals referencing digital commodities:
- Approval of KalshiEX LLC’s Bitcoin perpetual contract (BTCPERP) as a futures contract (the Kalshi Order)
- A policy statement addressing the treatment of certain Perpetuals under the Commodity Exchange Act (CEA) (the Policy Statement)
- CFTC Staff Letter No. 26-17, which addressed whether certain Deribit Perpetuals should be categorized as “foreign futures” under CFTC Regulation 30.1 and the treatment of digital commodities and payment stablecoins deposited to margin customer positions with a foreign broker pursuant to a right of reuse arrangement.3
The Kalshi Order
On May 29, 2026, the CFTC approved KalshiEX’s BTCPERP contract as a futures contract, concluding that listing the contract “for sale of a commodity for future delivery – would not violate the CEA or the Commission’s regulations thereunder.”4 The CFTC expressly rejected the view that a perpetual contract cannot qualify as a futures contract solely because it lacks a fixed expiration date.5 The Kalshi Order marks the first time the CFTC has formally approved a Perpetual referencing digital commodities as a futures product.
The Policy Statement
Issued alongside the Kalshi Order, the CFTC’s Policy Statement clarified its evolving view that certain Perpetuals referencing digital commodities may be listed and regulated as futures contracts.6 Concurrently, the CFTC emphasized the limited scope of its position and cautioned that “perpetual contracts that reference asset classes that are not contemplated in the Order should be submitted for Commission review and approval pursuant to the voluntary product approval process under Commission Regulation 40.3.”7 The Policy Statement therefore reflects a more flexible approach toward Perpetuals referencing digital commodities while stopping short of establishing a comprehensive framework applicable to Perpetuals more broadly.
CFTC Staff Letter No. 26-17
Also on May 29, 2026, the CFTC’s Market Participants Division (the Division) issued CFTC Staff Letter No. 26-17, concluding that certain Deribit Perpetuals may constitute “foreign futures” under CFTC Regulation 30.1.8
CFTC Staff Letter No. 26-17 also granted no-action relief for a structure under which Coinbase Financial Markets, a registered futures commission merchant, intermediates customer access to those contracts via a foreign broker and the offshore Deribit trading venue.9 In doing so, the Division effectively applied the existing Part 30 foreign futures framework to certain Perpetuals.
The Division emphasized that its interpretation was “limited in scope to perpetual contracts that are structured similarly to the Deribit Perpetuals” and based on digital commodities with “deep, active and continuous spot market trading.” The Division further noted that its conclusions were based on the specific facts presented.10 However, that interpretation “does not extend to perpetual contracts based on underlying asset classes other than digital commodities.”11
CFTC Staff Letter No. 26-17 suggests that the Division views the existing cross-border futures market infrastructure as available for certain digital commodity Perpetuals and that the long-standing Part 30 regime governing foreign futures may be used to provide access to a new category of cryptocurrency products.
CME challenges the CFTC’s classification of Perpetuals
On June 18, 2026, CME filed suit against the CFTC in the US District Court for the District of Columbia, challenging the Kalshi Order and Policy Statement as contrary to law under the CEA and arbitrary and capricious under the Administrative Procedure Act (the CME Complaint).12
CME argued that Perpetuals fit the statutory definition of a “swap” under the CEA because they (i) provide for the exchange of one or more payments based on the value of a commodity (funding payments), (ii) transfer financial risk between the parties without conveying ownership in the underlying asset, and (iii) lack any fixed expiration date or “future delivery” requirement.13 CME contended that by approving Perpetuals as futures, the CFTC circumvented the stricter regulatory regime Congress established for swaps under the Dodd-Frank Wall Street Reform and Consumer Protection Act.14
CME also asserted that the CFTC’s prior enforcement position classified Perpetuals as swaps.15 In its 2023 action against Binance, the CFTC alleged that “Binance’s perpetuals are swaps,” citing the contracts’ transfer of price risk between the parties, their lack of any predetermined expiration date, and their use of a funding-fee mechanism that requires routine payments between the parties.16 The CFTC took the same position in enforcement actions involving BitMEX, Mango Markets, Deridex, and KuCoin.17 The CME Complaint argues that the Kalshi Order reverses this position without acknowledgment or explanation.18
The CME Complaint raises additional procedural concerns. According to the CME Complaint, CFTC Chairman Michael S. Selig, acting as the sole confirmed commissioner, approved the Kalshi Order just one day after Kalshi submitted its application, despite CFTC regulations allowing 45 to 90 days for review of novel products.19 The CFTC did not provide any opportunity for public comment, notwithstanding that it received more than 150 comments in response to its April 2025 request for comment on perpetuals, none of which were addressed.20
If CME prevails, the court could vacate the Kalshi Order and Policy Statement and declare that digital commodity Perpetuals are “swaps” rather than “futures” under the CEA. Such an outcome would significantly alter the regulatory landscape for Perpetuals referencing digital commodities, potentially subjecting them to swap dealer registration requirements, heightened margin requirements, extensive data reporting obligations, and less favorable tax treatment under Section 1256 of the Internal Revenue Code.
SEC and CFTC seek public input on the future of derivatives regulation
Also on June 18, the CFTC and SEC jointly issued a request for comment, seeking input on clarifying the definitions of “swap” and “security-based swap” under the Title VII framework (the Joint RFC).21 The Joint RFC acknowledges that market participants are raising questions about “whether certain event contracts are swaps, SBS, or mixed swaps, or types of instruments that fall within statutory exclusions from the ‘swap’ definition” and specifically asks whether there is a need for “greater clarity regarding whether a cash-settled ‘perpetual’ contract referencing an equity security could be treated as a security future.”22
The Joint RFC also contemplates potential “alternative compliance” regimes where trading in “economically related or functionally similar product classes implicates both SEC and CFTC regulatory interests.”23 The agencies are exploring whether compliance with one agency’s regulatory framework could satisfy “substantially similar requirements” of the other.24 This suggests that the regulatory treatment of certain Perpetuals may evolve through future rulemaking.
Looking ahead
The events of the past month mark a pivotal moment in the regulation of Perpetuals in the United States. The CFTC has signaled a willingness to bring certain Perpetuals referencing digital commodities within the regulated futures framework while CME’s lawsuit and the agencies’ joint request for comment demonstrate that the legal and regulatory debate is far from settled. Market participants should expect continued scrutiny of Perpetuals and closely monitor the CME litigation and future SEC and CFTC actions, including guidance, interpretive statements, requests for comment, and potential rulemaking initiatives – all of which could significantly influence the regulatory framework governing digital commodity and equity-linked Perpetuals.
Footnotes
1. See CFTC, Order Approving KalshiEX LLC BTCPERP Futures Contract (May 29, 2026); CFTC, Policy Statement Concerning the Listing of Perpetual Contracts (May 29, 2026); CFTC Staff Letter No. 26-17, Staff Interpretative Letter Regarding the Categorization of Deribit Perpetuals as Foreign Futures and No-Action Position Regarding Digital Commodities and Payment Stablecoins Deposited to Margin Customer Positions with a Foreign Broker Under a Right of Re-Use (May 29, 2026)).
2. See Chicago Mercantile Exch. Inc. v. Selig (Complaint), No. 1:26-cv-02157 (D.D.C. filed June 18, 2026); see also CFTC/SEC, Joint Request for Comment on Further Definition of “Swap” and “Security-Based Swap” and on Alternative Compliance, Release No. 33-11424; 34-105735; File no. S7-2026-21 (June 18, 2026).
3. See Kalshi Order at 6; Policy Statement at 2, 5 (May 29, 2026); CFTC Staff Letter No. 26-17 at 3.
4. See Kalshi Order at 6, 9.
5. Id. at 6-8.
6. See Policy Statement at 2.
7. Id. at 5.
8. See CFTC Staff Letter No. 26-17.
9. Id. at 8.
10. Id. at 8, 15.
11. Id. at 8–9.
12. See CME Complaint.
13. Id. at * 111-120.
14. Id. at * 1, 9.
15. Id. at * 122-124.
16. Id. at * 123; see also CFTC v. Zhao (Complaint), No. 23-cv-1887 (N.D. Ill. Mar. 27, 2023), ECF No. 1.
17. See CFTC v. HDR Glob. Trading Ltd. (Complaint), No. 20-cv-8132 (S.D.N.Y. Oct. 1, 2020), ECF No. 1; CFTC v. Eisenberg (Complaint), No. 23-cv-173 (S.D.N.Y. Jan. 9, 2023), ECF No. 1; In re Deridex, Inc. (Consent Order), CFTC No. 23-42 (Sept. 7, 2023).
18. See CME Complaint at * 211.
19. Id. at * 137-139.
20. Id. at * 140-141.
21. See Joint RFC at 1.
22. Id. at 8.
23. Id. at 13-14.
24. Id. at 13.
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