The Capital Markets Alliance sued the Commodity Futures Trading Commission on Nov. 3, seeking to overturn single-stock perpetual derivatives approvals for Coinbase Derivatives, KalshiEX and Bitnomial Exchange.
The trade group, whose members include Cboe, Citadel Securities and Healthy Markets Association, argues that the contracts are security-based swaps under the Securities and Exchange Commission's exclusive jurisdiction. Its complaint was filed in the Southern District of New York as case 1:26-cv-09608. Cboe confirmed its participation in a separate statement.
CMA asks the court to vacate the approvals and declare the covered products security-based swaps. It also requests a temporary restraining order, preliminary and permanent injunctions, and a stay while the case proceeds. If granted, a stay would suspend the challenged approvals during litigation, while vacatur would set them aside. The requested injunction would prevent the CFTC from permitting the same contracts to be listed as security futures through an alternative route, including exchange self-certification.
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The challenge targets Sept. 18 product applications and related rule filings. According to the complaint, the CFTC's 45-day review period expired Nov. 2 without a rejection or extension. CFTC Chairman Michael Selig confirmed on Nov. 3 that the equity perps “were deemed approved” under Regulation 40.3 and could begin trading.
The contracts provide ongoing exposure to stock-price changes without ownership of the shares. Unlike dated futures, they have no fixed expiration and use recurring payments between long and short positions to help keep their prices aligned with the underlying stock.
CMA argues that the absence of an expiration date and future-delivery obligation makes the contracts swaps, not futures. It also alleges violations of the Administrative Procedure Act because the CFTC failed to explain its classification, reconcile it with its previous treatment of perpetuals, or adequately consider risks to investors and securities markets.
Selig's approval-day statement sets out a different position: the products are security futures subject to both CFTC and SEC regulatory frameworks. He said the eligible exchanges must also be notice-registered with the SEC to trade security futures products. The dispute is therefore over which securities-law regime applies, not simply whether the SEC has any role.
The alliance also identifies a commercial stake in its complaint: it says the new products threaten to divert customers, transactions and related revenue from its members' securities businesses.
Coinbase's Launch Plans and ICE's Separate Route
Coinbase's Sept. 18 submission covers a suite of perpetual contracts tied to individual equities and ETF shares, using an Apple-linked contract as its representative specification. It says the exchange intends to list shortly after CFTC approval, “pending any additional necessary regulatory approvals.”
ICE and TradeXYZ are not among the three applicants whose approvals CMA challenges. Their separate plan, announced Oct. 29, calls for a U.S.-regulated perpetuals market and clearing structure built on Hyperliquid, including equity markets. As The Defiant previously reported, that project remains subject to regulatory approvals.
A ruling that the challenged single-stock contracts are swaps rather than futures could complicate the futures route for that planned equity offering. ICE says its project still needs regulatory approvals, including permission to support leveraged trading.
