SEC Backs CFTC in Court Fight Over Single-Stock Perpetual Futures

The SEC has filed an amicus brief defending the CFTC against a lawsuit challenging its approval of single-stock perpetual futures. The suit, filed November 3, 2026, by the Capital Markets Alliance Association — a group whose members include Cboe and Citadel Securities — names the CFTC and its chairman, Michael S. Selig, as defendants.

Washington's two market regulators usually argue over turf. This time, one is defending the other in court. The SEC's brief cuts directly against the plaintiffs' framing: the lawsuit argues these products belong under SEC oversight, yet the SEC itself has now told the court it backs the CFTC's approval.

The stakes reach well beyond one product. The case asks which agency gets to police a new kind of derivative tied to individual stocks, and it decides whether crypto-native venues like Coinbase Derivatives, KalshiEX and Bitnomial Exchange can list it.

What is the dispute actually about?

Start with the product itself. A traditional futures contract is a bet with a deadline. It expires on a set date, and the trade settles. A perpetual future drops the deadline entirely, so a position can stay open indefinitely.

The CFTC approved single-stock versions of these contracts after a 45-day review under its Regulation 40.3, classifying them as security futures under the Commodity Futures Modernization Act of 2000. That label allows them to trade on exchanges meeting the relevant requirements.

The plaintiffs disagree with that classification. Their argument hinges on delivery: a futures contract traditionally obligates delivery at some future point, and a contract with no expiration never creates that obligation. If nothing is ever due, they contend, calling it a future stretches the definition past its breaking point. If they win, the products would be deemed security-based swaps under SEC jurisdiction.

The court has already weighed in once, and the result split both ways. It signaled the plaintiffs are likely to succeed on their claim that the products are security-based swaps. It also denied their request for a temporary restraining order, finding they had not shown irreparable harm.

Who lined up on which side?

The amicus filings divide along predictable lines:

• Backing the CFTC: Coinbase Derivatives and Kalshi, two of the venues positioned to list the contracts, plus the SEC itself.
• Opposing the approval: Better Markets and a group of former SEC officials.

Security futures already sit in an unusual spot in US market regulation. They are jointly overseen by both agencies, which is rare. The SEC's support suggests the two regulators are, for now, comfortable sharing the arrangement.

The plaintiff group's membership is worth noticing too. Cboe runs major US options and equities venues, and Citadel Securities is one of the largest market makers in US stocks. The approval's defenders come largely from the crypto and prediction-market world — Coinbase Derivatives and Kalshi built their US businesses under CFTC oversight, and Bitnomial operates in the same regulatory lane.

What does this change for markets and platforms?

If the plaintiffs win and the contracts are deemed security-based swaps, the regulatory picture changes substantially. Securities rules generally carry tougher investor protections than the framework currently applied. That could mean more scrutiny of how the contracts are offered and to whom, and platforms like Coinbase Derivatives, Kalshi and Bitnomial could face reworking or pulling a product line approved through the CFTC process.

The court's early signal is the variable to watch. A judge who thinks the plaintiffs are likely to win on the merits has not yet ruled on those merits. Platforms are operating in that gap — approval in hand, legal question hanging overhead.

The SEC's brief adds weight to the CFTC's side, but courts interpret statutes, not agency preferences. The definition of a future under the 2000 law will likely matter more than either regulator's comfort, and a merits ruling on that definition is the decision the entire market is now waiting for.