US perpetual futures market faces CME legal challenge

US investors are gaining regulated access to perpetual-style crypto futures, bringing funding payments, leverage and automatic liquidations into a market long dominated by offshore exchanges. Perpetuals account for more than 90% of crypto derivatives volume in some measures, while derivatives make up about 80% of overall crypto trading.

Coinbase has launched nano Bitcoin and Ethereum contracts on its CFTC-regulated exchange. The products track spot prices and trade around the clock, but use five-year expirations and hourly funding settled twice daily. KalshiEX's BTCPERP, approved by the CFTC in May, is a genuine no-expiry Bitcoin perpetual. Kalshi has since self-certified more than a dozen additional contracts, with reported trading above $1 billion.

The legal foundation for these products is now under review. CME sued the CFTC in June, arguing that perpetuals meet the Commodity Exchange Act's definition of swaps and should face stricter dealer, capital and reporting requirements. The agency has rejected the challenge and said it expects the case to be dismissed.

The outcome could affect how widely perpetuals expand in the US. These contracts concentrate liquidity into one market and use funding to keep prices near spot, but their leverage can also speed up liquidation cascades. Meanwhile, Coinbase and Nodal Clear are seeking approval to accept Circle's USDC as collateral for US futures, which could reduce the separation between crypto-native funds and regulated derivatives accounts.