CME Group Chief Executive Terrence Duffy said the company intends to sue the U.S. Commodity Futures Trading Commission (CFTC) following its recent approval of perpetual futures contracts.
In an interview with CNBC on Wednesday, Duffy argued that the perpetual futures product approved for Kalshi does not meet the legal definition of a futures contract under the Dodd-Frank Act. He said the structure instead resembles a swap, which is governed by a different set of regulatory requirements.
Duffy said the law clearly distinguishes between swaps and futures, noting that agreements involving ongoing payment exchanges between counterparties are typically classified as swaps. On that basis, he questioned the regulator’s decision to categorize the product as a futures instrument.
The CME chief, who is expected to step down next year, added that the company would require clearer regulatory guidance before considering whether to introduce its own perpetual futures offerings. He said the current rules governing such products remain unclear.
He also criticized aspects of the CFTC’s recent communications on market structure, suggesting the agency had, in some instances, framed proposals as finalized rules, including those related to 24/7 trading.
“There are a lot of issues that need clarity,” Duffy said.
A CFTC spokesperson rejected CME’s position, accusing the exchange operator of opting for legal action instead of competing in the marketplace. The agency said it is prepared to defend its decision and expects the lawsuit to be dismissed.
