Six Firms Including Coinbase Back CFTC on Stock Perpetual Futures in Court

Six Firms Side With the CFTC in SDNY

Six companies led by Coinbase asked a federal court in Manhattan on November 9 to accept a joint brief defending the Commodity Futures Trading Commission (CFTC) against a lawsuit that seeks to undo its approval of single-stock stock perpetuals. Coinbase, prediction-market operator Kalshi, Payward, DRW Holdings, Jump Trading and Paradigm Operations filed the proposed amicus brief in the U.S. District Court for the Southern District of New York, where the Capital Markets Alliance Association is challenging the regulator's handling of equity perpetual applications. Coinbase Derivatives, KalshiEX and Bitnomial Exchange submitted listing applications on September 18 for perpetual contracts tied to individual large-cap U.S. stocks; all three were deemed approved on November 2 under the CFTC's product review process. Payward, the parent of Kraken, acquired Bitnomial earlier this year and also operates NinjaTrader, a futures broker registered with the CFTC. The three trading firms identified themselves as market participants with existing or potential interests in equity perpetual trading.

The core of the brief is a definitional argument. Under the Commodity Exchange Act, the firms contend, a security future cannot by definition be a swap, so the only question before the court is whether perpetual futures on single stocks meet the statutory definition of security futures. They argue the products do: each contract references one stock, settles in cash, carries standardized terms, margin requirements and centralized clearing, and uses funding payments to track the underlying share price. The absence of a fixed expiration date, they maintain, does not remove the contracts from the security futures framework Congress created through legislation enacted in 2000. Coinbase general counsel Molly Abraham defended the filing on that basis on November 10, and Vice Chairman Ryan VanGrack wrote in a public post the same day that “The U.S. should lead, not cede, this space.”

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CMA Seeks to Vacate the November 2 Approvals

The dispute began on November 2, when the Capital Markets Alliance, whose members include Cboe and Citadel Securities, filed suit to overturn the CFTC's treatment of single-stock perpetual derivatives. The association argues that contracts without expiration dates should be classified as security-based swaps under Securities and Exchange Commission (SEC) jurisdiction, and its complaint alleges the CFTC exceeded its authority by letting the contracts proceed as security futures without adequately explaining the decision or weighing consequences for securities markets. Association secretary Adam Ford has said that introducing products outside established regulatory requirements could weaken investor protections and market oversight.

The brief answers those claims directly. It argues the SEC was present from the start: the two agencies jointly sought public comment on how perpetual contracts should be treated, the listing exchanges registered with the SEC and filed their listing standards with both agencies, and the alliance itself submitted comments during that consultation. The filing quotes SEC Chairman Paul Atkins on how stock perpetuals had long been stalled over which rulebook applies, before the agencies moved this year to clarify jurisdiction and bring a product traded mostly offshore to U.S. investors. Moving the contracts into the security-based swap category, the firms argue, would not make investors safer, because the SEC has never adapted that category for retail trading on an exchange; it would push stock perpetuals back offshore, and a preliminary injunction would block three already-approved venues from listing already-approved products, causing what the brief calls irreparable harm.

The procedural posture matters. On November 3, U.S. District Judge Valerie Caproni denied the alliance's request for a temporary restraining order, finding it had not shown harm sufficiently immediate to justify emergency intervention. Her preliminary assessment nonetheless favored the plaintiff's reading of the law: perpetual derivatives do not provide for delivery of a security on a specified future date and appear instead to meet the definition of security-based swaps. The judge left the approvals in place and directed the parties to continue briefing the preliminary injunction request, with the CFTC's opposition due November 6 and the alliance's response scheduled for November 10. The six firms ask the court to deny the injunction and leave the classification question for later.

Caproni's Order Frames the Stakes

Our reading: the brief targets the injunction stage, not the final classification. Caproni's November 3 order already doubted that perpetual contracts fit the security futures definition, yet left the deemed approvals standing, so Coinbase Derivatives, KalshiEX and Bitnomial can keep preparing launches while briefing continues. An injunction would reverse that posture immediately. The filing's strongest practical point is jurisdictional: the SEC joined the consultation, exchanges filed listing standards with both agencies, and Chairman Atkins has acknowledged the rulebook question that stalled these products for years. If the court accepts that joint-oversight record, the products stay on a regulated path; if it sides with the alliance's swap reading, demand for U.S. equity exposure through venues such as Bitget Stock Futures likely grows instead.