CFTC and SEC requested a review of rules for crypto derivatives amid a legal conflict with CME.
U.S. regulators — the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) — have initiated a public discussion on the definitions of swaps and other derivative instruments. This is a direct signal that the current regulatory framework established by the Dodd-Frank Act no longer meets the realities of the modern digital asset market.
This step comes amid a sharp confrontation with the Chicago Mercantile Exchange (CME Group). On June 17, CME CEO Terrence Duffy announced plans to file a lawsuit against the CFTC. The reason is the agency's approval for the Kalshi platform to launch perpetual futures. CME, which has long dominated the institutional derivatives market, perceived this as a direct threat to its position.
Regulators intend to clarify rules for new financial products, including contracts on prediction markets and perpetual futures. The key question is whether current norms align with the rapidly changing market structure, where innovation often outpaces legislation.
CFTC Chairman Michael Selig emphasized that the initiative aims to eliminate uncertainty in the Dodd-Frank Act, which, he says, hinders fair competition. His SEC colleague Paul Atkins added that clarifying rules for event contracts is long overdue. The comment period will last 60 days.
A CFTC representative has already called the CME lawsuit "unfounded" and accused the exchange of trying to block progress through the courts. In his view, dominant players are simply afraid of competition on a level playing field. This criticism was echoed by representatives of the decentralized exchange Hyperliquid. In their statement, they noted that CME controls about 92% of the U.S. derivatives market and seeks 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 Hyperliquid Policy Center emphasized.
Recall that in May, the CFTC already admitted its lawsuit against Gemini was erroneous, stating that the methods of the previous leadership were "inappropriate." This indicates a shift in approach within the agency, which now aims for more flexible regulation.
My analysis: This request is not just a bureaucratic formality. It is an attempt by the CFTC and SEC to legitimize new instruments that are already actively used outside the U.S. If the rules are revised in favor of innovation, we will see not only growth in prediction markets and perpetual futures but also a serious blow to CME's monopoly. However, the giant's lawsuit could drag out the process, and investors should prepare for a period of heightened volatility in regulatory news.