CME Group CEO Terry Duffy said crypto perpetual futures, known as perps, are actually swaps—a classification that would subject them to stricter post-2008 rules. His exchange is already suing the Commodity Futures Trading Commission (CFTC) to secure that label, even though the regulator says CME could list the same contracts itself.
Why Duffy Says Perps Are Swaps
The CFTC has taken the opposite view, approving a Bitcoin (BTC) perp from prediction market platform Kalshi as a futures contract on May 29. Perps are contracts with no expiry date that let traders hold leveraged positions indefinitely. Duffy’s case rests on the funding rate—the payments longs and shorts exchange to keep a perp tracking spot prices.
“And that is the definition of a swap,” Duffy said in an interview after the exchange posted record third-quarter revenue.
Is a Retail Product Worth a Lawsuit for an Institutional Exchange?
Duffy said perps are mostly retail products outside CME’s main client base. On a July call, he put institutional traders at 94% of first-half volume and said customers were not asking for perps. CME’s June 18 complaint claims Kalshi’s perps target retail investors who also use CME’s products.
Meanwhile, the CFTC’s September 2 motion to dismiss argues CME lacks legal standing—the right to sue—because it can list perps itself.
What Is at Stake for US Traders if a Court Picks a Label?
Law firm Cahill says futures status changes how customer collateral is protected and supports futures-style tax treatment, though tax questions remain open. Duffy warned that some offshore perps run 250x leverage and said he has seen no rulemaking to limit it. He dismissed entrants’ pledges to cap leverage as empty without rules behind them.
In contrast, Kalshi CEO Tarek Mansour said its perps offer roughly six times leverage, comparable with traditional futures.
For now, no ruling has been reported. A dismissal on standing could end the case without deciding whether a perp is a future or a swap, leaving a market that any registered exchange may now list under a classification no court has decided.
