A group of six cryptocurrency‑related firms has filed a proposed friend‑of‑the‑court brief in a federal lawsuit that questions the Commodity Futures Trading Commission’s authority to approve perpetual futures linked to individual U.S. stocks. The brief supports the CFTC’s position in the case brought by the Capital Markets Alliance Association.
Firms backing the CFTC
The companies filing the brief are Coinbase, Kalshi, Payward (parent of Kraken), DRW, Jump Trading and Paradigm. Their intervention follows recent approvals for new stock‑linked perpetual products earlier this month.
Legal background
Perpetual futures contracts provide exposure to price movements without a set expiration date. While such contracts are common in cryptocurrency markets, applying the structure to a single listed U.S. company raises a statutory question about which regulator’s rules apply and what obligations the exchange must meet.
The Capital Markets Alliance argues that these contracts fall under securities law rather than the CFTC’s jurisdiction over security futures. The six firms contend that the law permits the CFTC’s approach and that restricting the products could push U.S. investors toward offshore alternatives.
Recent court action
On November 3, Judge Valerie Caproni denied a request for a temporary restraining order, meaning the plaintiff did not obtain an immediate halt to the CFTC’s approvals. The judge noted that the plaintiff is likely to succeed on the statutory question but did not find the immediate irreparable harm needed for emergency relief.
This denial does not constitute a final judgment on the legality of the products; the case will continue with further briefs and arguments.
Implications
The classification of these contracts influences customer protections, margin requirements, market surveillance and the ability to offer the products to eligible participants. The outcome of the case could affect how U.S. regulators address perpetual trading conventions and future listings of similar products.
