Bitcoin Magazine

Judge Lets Stock Perpetual Futures Keep Trading but Says CFTC Likely Overstepped Its Authority

Stock perpetual futures can keep trading on Kalshi, Coinbase Derivatives and Bitnomial for now after a federal judge denied an emergency bid to halt them Tuesday, while finding that the Wall Street-backed challengers are likely to prove the CFTC overstepped its authority.

U.S. District Judge Valerie Caproni denied the temporary restraining order on Nov. 3 after a teleconference with the parties, hours after the CFTC said the products could begin trading on U.S.-regulated exchanges.

The plaintiff is the Capital Markets Alliance Association, a New York nonprofit whose members include Cboe Global Markets, Citadel Securities and the Healthy Markets Association, according to a declaration from its secretary, Adam Ford.

The group sued the CFTC and Chairman Michael S. Selig in the Southern District of New York, case No. 1:26-cv-09608, seeking to undo the approvals of filings by all three exchanges.

Caproni wrote that the group “is likely to succeed on the merits” of its claim that the agency lacks statutory authority to allow perpetual derivatives on individual stocks to be offered to retail investors on CFTC-regulated platforms.

“Because the perpetual contracts, by definition, do not provide for a ‘sale for future delivery of a single security,’ they cannot be a security future over which the CFTC has statutory and regulatory authority,” she wrote.

Instead, she said, the contracts “appear to satisfy the definition of a swap,” which falls to the Securities and Exchange Commission.

She also found that the balance of equities and the public interest favor the alliance, writing that the agency’s actions “seem to represent a major disruption to the equities market.”

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