Coinbase, Kalshi, and five other companies, including Payward, the parent company of Kraken, have asked a court for permission to file a brief supporting the CFTC in a lawsuit challenging the approval of perpetual contracts tied to U.S. stocks.
According to the court filing reported by The Block, Coinbase, Kalshi, and Payward were joined by DRW Holdings, Jump Trading, and Paradigm. The six companies want to file a brief defending the U.S. Commodity Futures Trading Commission’s (CFTC) authority to regulate these products.
The filing came after the Capital Markets Alliance (CMA), whose members include Cboe and Citadel Securities, filed a lawsuit seeking to overturn the CFTC’s approval. Applications by Coinbase, Kalshi, and Payward to list these contracts tied to U.S. stocks were deemed approved on November 2.
The dispute centers on who will oversee stock-linked perpetual contracts
Known as “perpetuals” in crypto markets, these contracts allow investors to trade on price movements without buying the stock and do not expire on a set date. The CMA argues that because these products have no expiration date, they should be classified as security-based swaps and fall under the jurisdiction of the Securities and Exchange Commission (SEC), rather than the CFTC.
The companies, however, say the SEC has been involved in the process from the outset and that the two agencies jointly sought public comment on whether these contracts qualify as security futures. Coinbase executive Ryan VanGrack said U.S. investors should also be able to access these products, which already trade in global markets, under the joint oversight of the two agencies.
Not investment advice.