Cboe, Citadel-Backed Group Sues CFTC to Stop Single-Stock Perps

The CFTC opened the door to perpetual futures on single U.S. stocks on Tuesday. Within hours, a group backed by Cboe and Citadel Securities was in court trying to shut it.

The Capital Markets Alliance filed suit in federal court in Manhattan asking a judge to vacate the CFTC's approval of these contracts, declare them security-based swaps, and bar the approvals from taking effect while the case runs. Its members include Cboe, Citadel Securities and the Healthy Markets Association, per a Cboe statement. The Defiant reported that the complaint targets approvals for Coinbase, Kalshi and Bitnomial.

How a perp works, and why the label matters

A perpetual future has no end date. Traders on one side pay the other a small funding fee to keep its price near the stock. The fight is over what to call it. The CFTC treats these as security futures, which fall under both the CFTC and the SEC. The alliance says they are security-based swaps, which Congress put under the SEC alone. The label decides which venues can list them and which protections apply.

The case against

The group argues the CFTC gave no explanation, ignored that it "has long treated perpetual derivatives as swaps," and did not weigh the impact on investors. "The hasty roll out of financial products that circumvent well-established regulatory frameworks erodes investor protection," said Adam Ford, the alliance's secretary. Cboe CEO Craig Donohue said the products "belong on registered securities platforms."

The other side

A CFTC spokesperson called the suit "troubling" interference, Reuters reported: "Our markets should be governed by law, not litigation campaigns intended to block innovation." CFTC Chairman Michael Selig said Tuesday the contracts sit under both agencies' rules and that exchanges must also register with the SEC to list them. The SEC did not immediately respond to Reuters. We found no public response from Coinbase, Kalshi or Bitnomial, which are not defendants.

Follow the money

Reuters noted that prediction-market firms see perps as a growth path on ground held by traditional firms. The Chicago Mercantile Exchange sued the CFTC in June over crypto perps from Kalshi and Coinbase.

In our opinion: This is a turf war about where stock bets get made, and both sides wrap their case in investor protection. The answer decides who earns fees on a product crypto traders already love. Watch whether the court grants the emergency stay, because that decides if any stock perp trades before a ruling.