Coinbase, Kalshi and Payward Back CFTC in Equity Perps Lawsuit

Coinbase, Kalshi, Kraken parent Payward, DRW Holdings, Jump Trading and venture firm Paradigm have asked a federal court for permission to file an amicus brief defending the Commodity Futures Trading Commission's authority to regulate single-stock perpetual futures in the United States, according to a Monday court filing.

The filing responds to a lawsuit brought last week by the Capital Markets Alliance, an industry association whose members include Cboe and Citadel Securities. The CMA seeks to overturn the CFTC's approval of equity perpetual futures. That is the core dispute: whether a derivative without an expiration date belongs on a CFTC-regulated exchange at all.

What is actually at stake?

The stakes are concrete rather than theoretical. According to the Monday filing, Coinbase, Kalshi and Payward have each submitted applications with the CFTC to list equity perpetuals tied to U.S. stocks, and those applications were deemed approved on Nov. 2. A ruling that upends the approvals would close an onshore listing path these firms have already built toward.

Perpetual futures, commonly called perps, let traders speculate on an asset's price without holding the underlying instrument. Unlike traditional futures, they carry no expiration date. That single design feature is the legal fault line in the case.

How does each side read the law?

The CMA argues that equity perps, lacking a set expiry, are not futures at all. It contends they are security-based swaps that cannot be listed on CFTC-regulated exchanges, and that the commission encroached on the Securities and Exchange Commission's jurisdiction when it approved them.

The crypto firms reject that framing. The Monday filing states that the SEC was "at the table from the very start" of the regulatory process.

"The agencies jointly sought public comment on whether perpetual contracts should be classified as security futures," the filing said.

Molly Abraham, general counsel of Coinbase, wrote on X that under the Commodity Exchange Act and the securities futures framework Congress established in 2000, security futures products are not swaps. If the court accepts that reading, the CMA's jurisdictional argument loses its statutory footing.

Coinbase Vice Chairman Ryan VanGrack framed the competitive dimension.

"U.S. investors deserve access to these markets under the strong consumer protections and joint oversight of the CFTC and SEC," VanGrack said. "The U.S. should lead, not cede, this space."

He separately noted that global markets are already trading equity perps, which puts the dispute in context: the question is not whether these products exist, but whether U.S. venues may offer them under domestic oversight. The claim of strong consumer protections deserves scrutiny, however, since perps remain leveraged instruments and no filing quantifies investor safeguards in operational terms.

What does the amicus brief change?

An amicus brief does not make the six firms parties to the case. It gives them a procedural vehicle to argue that the CFTC acted within its mandate, and it signals that the outcome carries commercial weight beyond the two agencies. For Coinbase and Kraken, both of which operate derivatives venues, an adverse ruling would restrict product expansion. For DRW and Jump Trading, both major liquidity providers, it would narrow the onshore market they can serve.

The alignment is notable in another respect. Traditional exchange and market-making incumbents, through the CMA, are contesting the approvals, while crypto-native firms and their investors defend the regulator's action. The case has effectively split the derivatives industry along market-structure lines.

The firms' argument also rests on process: joint agency consultation, public comment and a congressional framework from 2000. What the filing does not address directly is the CMA's substantive claim about expiration dates, leaving the definitional question for the court to resolve.

The court has yet to rule on the motion for leave, and no hearing date has been set. A decision upholding the approvals preserves the onshore path; a decision against them would force the products back into regulatory redesign or offshore venues. The outcome will shape how, and whether, equity perpetuals trade in the U.S. market.