CFTC stock perpetual contracts face legal defense from Coinbase and others amid a challenge over regulatory oversight and classification.
Coinbase, Kalshi and Kraken parent Payward have joined three trading firms in defending the CFTC’s authority over single-stock perpetual contracts, asking a federal court to accept a brief supporting the regulator. Their November 9, 2026 filing challenges an industry association’s argument that stock derivatives without expiration dates belong under a different regulatory framework.
Summary
Key takeaways
- Six firms are seeking permission to defend the CFTC’s stock-perpetual approvals.
- The Capital Markets Alliance argues the products are security-based swaps.
- A judge denied emergency relief but questioned the contracts’ classification.
- The firms contend existing law provides for joint SEC and CFTC supervision.
Six companies back CFTC’s authority over perpetual stock contracts
A proposed amicus brief supporting the Commodity Futures Trading Commission was jointly filed by Coinbase, Kalshi, Payward, DRW Holdings, Jump Trading and Paradigm Operations. According to the filing, the Commodity Exchange Act permits perpetual contracts to fit within the security futures framework even though they carry no fixed expiration date.
“A security future—by definition—cannot be a swap,” the firms wrote. Rather than focusing on resemblance to other derivatives, their argument centers on whether these products satisfy the legal criteria for security futures.
The dispute is pending before the U.S. District Court for the Southern District of New York under the case Capital Markets Alliance Association v. Commodity Futures Trading Commission, No. 1:26-cv-09608-LGS.
Coinbase Derivatives, KalshiEX and Bitnomial Exchange applied on September 18, 2026 to list perpetual contracts referencing individual large-cap U.S. stocks. Those applications were deemed approved on November 2, 2026 through the CFTC’s product-review process. The CFTC’s November 3, 2026 clearance covered the first equity perpetual futures for eligible domestic trading venues.
Payward acquired Bitnomial earlier in 2026. DRW, Jump Trading and Paradigm described existing or potential interests in trading equity perpetuals.
Capital Markets Alliance seeks to overturn approvals
The Capital Markets Alliance Association argues that the contracts should be classified as security-based swaps under Securities and Exchange Commission jurisdiction, not as security futures. Its members include Cboe and Citadel Securities.
In its November 2, 2026 lawsuit, the association alleged that the CFTC exceeded its authority, inadequately explained its decision and failed to consider consequences for securities markets. It argues that security-based swaps cannot be listed on CFTC-regulated exchanges.
According to association secretary Adam Ford, launching products that fall outside existing regulatory standards risks undermining investor protections and market oversight. The alliance has asked the court to set aside the approvals and block their effect during the litigation.
Judge denies emergency relief but questions classification
U.S. District Judge Valerie Caproni denied the alliance’s temporary restraining order request on November 3, 2026, finding the harm insufficiently immediate to justify emergency intervention. The approvals stayed in place.
Her preliminary legal assessment nevertheless favored the plaintiff’s interpretation. Caproni questioned whether contracts without delivery of a security on a specified future date satisfy the statutory definition of security futures. She found that the products instead appeared to fit the definition of security-based swaps, generally regulated by the SEC.
The court directed further briefing on a separate preliminary injunction request. The six firms have asked the court to reject that request.
Expiration dates divide the legal arguments
The firms defending CFTC oversight of stock perpetual contracts say the products retain core futures features: standardized terms, margin requirements and centralized clearing. Unlike conventional futures, however, they have no scheduled expiration date.
Funding payments help keep contract prices linked to the referenced stock, and traders can exit positions without waiting for maturity. The firms argue that the existing security futures regime already supplies joint CFTC and SEC oversight.
Under that framework, participating exchanges must retain CFTC designation and meet applicable SEC registration requirements. Coinbase submitted SEC registrations in September 2026 for its derivatives exchange and brokerage operations.
The proposed brief further notes that both agencies invited public input on whether perpetual contracts should be classified as security futures, while Coinbase’s general counsel, Molly Abraham, backed the filing on November 10, 2026, citing the regulatory framework Congress established in 2000. Coinbase Vice Chairman Ryan VanGrack separately argued that U.S. investors deserve access under joint agency oversight, noting that global markets already trade equity perpetuals.
The CFTC’s opposition to the preliminary injunction request was due November 6, 2026. The alliance’s response was scheduled for November 10, 2026, subject to changes by the assigned judge.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.
