Coinbase, Kraken Parent and Kalshi Back CFTC in Stock Perps Lawsuit

Six digital asset and trading firms — Coinbase Global, Kalshi, Payward, DRW Holdings, Jump Trading and Paradigm — filed a letter supporting the U.S. Commodity Futures Trading Commission in a lawsuit over its authority to regulate perpetual futures on individual stocks. The filing, submitted to the United States District Court for the Southern District of New York, backs the CFTC against a challenge brought by the Capital Markets Alliance (CMA) earlier this month.

The CMA sued to overturn the CFTC's approval of open-ended futures contracts for stocks, products modeled on perpetual futures in the cryptocurrency derivatives market. The group says it counts traditional finance firms among its backers, including the broker-dealers Cboe and Citadel Securities.

Why do crypto firms care about equity derivatives?

Three of the letter's signatories have direct commercial stakes. Coinbase, Kalshi and Payward — the parent company of Kraken — have each submitted applications to list U.S. stock perpetuals, and those applications were deemed approved on Nov. 2. A court ruling stripping the CFTC of jurisdiction over the products could stall or unwind those listings before launch.

Perpetual futures are derivative contracts that let traders take positions on the future price of an asset. Unlike traditional futures, they carry no expiry date, which means positions can remain open indefinitely. The structure dominates crypto trading venues and is now being ported to equities, a market historically governed by securities rules.

What does the CMA argue?

The CMA contends that equity-linked perps fall under the jurisdiction of the Securities and Exchange Commission, not the CFTC. The claim touches a long-running boundary dispute between the two agencies over which regulator controls derivative products tied to securities. A win for the CMA would push stock perpetuals into the SEC's registration framework, a slower and more disclosure-heavy path than the CFTC's listed-contracts regime.

The CFTC did not accept the challenge quietly. A CFTC spokesperson described the action as "troubling" in a Nov. 3 email to CoinDesk, the day the CMA filed the lawsuit. "Our markets should be governed by law, not litigation campaigns intended to block innovation," the spokesperson said.

What is at stake for market structure?

The amicus letter aligns the crypto sector's largest exchanges and market makers with the CFTC's position, a notable inversion of the usual pattern in which crypto firms face the agency in enforcement matters. Coinbase, Kalsho and Payward's approved applications show the commercial pipeline is already live: the dispute is not hypothetical but tied to products cleared to list as of Nov. 2.

For the CMA's traditional finance members, the products raise competitive and jurisdictional concerns: equity perps listed under CFTC rules would bypass the exchange and clearing infrastructure that broker-dealers currently operate. For the crypto firms, a CFTC win extends their derivatives franchises into equities without triggering SEC registration.

The case now sits with the Southern District of New York, where the court's reading of the CFTC's statutory authority over securities-linked futures will determine whether stock perpetuals launch under the derivatives regulator or face years of securities-law restructuring.