CME CEO Terry Duffy Calls Crypto Perps Swaps in CFTC Court Fight

Duffy Calls Perps Swaps

CME Group CEO Terry Duffy has called crypto perpetual futures swaps rather than futures, a label that would move the products under the tighter rulebook regulators wrote for the swaps market after 2008. The statement came in an interview published after the exchange posted record third-quarter revenue, and it lands in the middle of an active court fight: CME is suing the Commodity Futures Trading Commission (CFTC) to win that very classification. Perpetual futures, known in the industry as perps, are contracts with no expiry date, so a trader can hold a leveraged position indefinitely. Their price stays tied to the spot market through the funding rate, a recurring payment that long and short positions exchange with each other. Duffy's argument is that this payment mechanism is what swap contracts do. “And that is the definition of a swap,” he said. The CFTC has already taken the opposite view: on May 29 the regulator approved a Bitcoin (BTC) perpetual contract from prediction market platform Kalshi as a futures contract, the decision CME is now contesting in court. Under a swaps reading, the products would fall into the post-2008 derivatives framework rather than the futures regime. Duffy has also framed the fight as one over a market that is not his exchange's core business. On a July call, he put institutional traders at 94% of CME's first-half volume and said his customers were not asking for perpetuals, describing the products as mainly retail instruments outside the client base he serves. He added a warning about conditions offshore: some overseas perps offer leverage of up to 250 times, and he said he has seen no rulemaking anywhere to limit it, dismissing entrants' pledges to cap leverage as empty without enforceable rules behind them.

CME's June 18 Complaint

The litigation has a defined record. CME's June 18 complaint argues that Kalshi's perps target retail investors who also use CME's products, which the exchange presents as direct competitive injury. The CFTC answered on September 2 with a motion to dismiss, contending that CME lacks legal standing because it could simply list the same perpetual contracts itself. The motion reframes the dispute: the question before the court would shift from what a perpetual contract is to whether CME is the right plaintiff to ask. Law firm Cahill has noted that the classification is not cosmetic, since futures status changes how customer collateral is protected and supports futures-style tax treatment, although open tax questions remain even under the current futures reading. The leverage dispute continues on both sides of the case. Kalshi CEO Tarek Mansour has said its perps offer roughly six times leverage, which he described as comparable with traditional crypto futures, a direct answer to Duffy's account of 250x offshore conditions. For retail participants, the products sit at the most accessible end of contract trading in crypto, which is why both sides keep returning to the leverage figures. No ruling has been reported so far. A dismissal on standing would 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 settled.

Our reading of the docket is that this is a market-structure decision in disguise. The CFTC's own May 29 approval means the agency cannot argue the products are unregistered, so the fight is purely over which rulebook applies and who may challenge the choice. If the judge grants the dismissal on standing, perps would stay onshore under an undecided label, and the gap between the 250x conditions Duffy described and the roughly six times leverage Kalshi says it offers would remain outside any binding rule. The motion ruling is the near-term catalyst to watch.