CFTC and SEC initiate review of crypto derivatives regulation amid legal conflict with CME
The U.S. Commodity Futures Trading Commission (CFTC) and the U.S. Securities and Exchange Commission (SEC) have announced a public request for comments regarding the definitions of swaps and other derivative instruments. This step is aimed at adapting the regulatory framework to the modern realities of the crypto market.
The request for comments comes amid a sharp conflict between the CFTC and the Chicago Mercantile Exchange (CME Group). On June 17, CME CEO Terrence Duffy announced plans to file a lawsuit against the CFTC. The reason was a permit issued by the agency to the Kalshi platform to launch perpetual futures — a product that CME considers a threat to its monopoly.
Regulators plan to clarify rules for new financial products, including contracts on prediction markets and perpetual futures. The main goal is to assess whether current norms align with the rapidly changing market structure. CFTC Chairman Michael Selig emphasized that the initiative aims to eliminate uncertainty in the Dodd-Frank Act, which hinders fair competition. His SEC colleague Paul Atkins added that clarifying rules for event contracts is long overdue.
The comment collection period will last 60 days. A CFTC representative has already called the CME lawsuit "unfounded," accusing the exchange of trying to fight progress through the courts. According to him, dominant players fear competition on a level playing field.
Representatives of the decentralized exchange Hyperliquid also joined the criticism. The Hyperliquid Policy Center noted that CME controls about 92% of the U.S. derivatives market and is clearly trying to maintain its monopoly. "Americans have been going offshore for years to trade perpetual futures. This is the first truly new product on the regulated U.S. market in a decade. Competition benefits users, and innovation deserves clear rules," the organization stated.
Recall that in May, the CFTC admitted its lawsuit against Gemini was erroneous, stating that the methods of the previous leadership were "inappropriate." This signals a shift in the agency's course toward a more balanced approach to regulation.
My expert assessment: The CFTC and SEC initiative is a long-awaited step toward legalizing perpetual futures in the U.S. However, the CME lawsuit could drag the process out for years. If regulators hold firm, it will pave the way for dozens of new products and attract billions of dollars in liquidity from offshore markets. The CME monopoly is cracking, and this is a positive signal for the entire industry.