The U.S. Commodity Futures Trading Commission approved U.S. equity perpetual futures for the regulated American market on Nov. 3, giving stock-linked perpetual contracts their first clear regulatory opening in the country. Later the same day, Capital Markets Alliance, backed by traditional firms including Cboe and Citadel Securities, filed suit in the U.S. District Court for the Southern District of New York seeking to overturn that approval.
The timing put the clash in plain view. Kalshi, Coinbase Derivatives, Bitnomial, described in the source as a Kraken sister company, and OG.com, under Crypto.com, had already been moving toward launching equity perpetual futures. What had been a regulatory process quickly turned into a direct contest between crypto-native venues and established Wall Street players.
Four crypto platforms moved early after the CFTC opened the door
Perpetual futures have long been one of the main trading instruments in crypto markets. They do not have a fixed expiration date. Instead, they use a funding-rate mechanism to keep contract prices close to the spot market. Traders can gain leveraged exposure to price moves without owning the underlying stock, but they do not receive shareholder rights or voting power.
That structure is now being carried into the U.S. equity market. The CFTC's shift did not begin on Nov. 3. On May 29, the agency first allowed Kalshi's bitcoin perpetual futures product, BTCPERP, setting an earlier precedent. It later issued a policy statement on listing perpetual contracts and said products tied to different underlying assets, including stocks and precious metals, would require case-by-case review.
Applications then spread quickly into stock and ETF-linked products. On Sept. 18, Kalshi, Bitnomial and Coinbase Derivatives all filed on the same day. OG.com followed on Sept. 24.
The first batch of proposed contracts was closely aligned across the four venues. Most were tied to large-cap technology names including Nvidia, Apple, Tesla and Microsoft, as well as major index ETFs such as SPY and QQQ.
In terms of trading design, these equity perpetual products are planned to trade continuously from Sunday evening to Friday evening. That would cover much of the time outside regular U.S. stock market hours, though it would still stop short of the 24/7 schedule common in crypto. For retail traders, the practical change is straightforward: they would no longer need to rely only on traditional U.S. equity options to trade price swings in large-cap tech stocks, and could use a different instrument for short exposure or hedging.
The source notes that the CFTC's action was based more on a mechanism under which a product is treated as approved once the review period expires, rather than on the agency issuing individual formal approvals or licenses to each of the four firms. The initial 45-day review period for the first three had expired on Nov. 2. OG.com's deadline is Nov. 8.
That does not place the products outside the reach of the U.S. Securities and Exchange Commission. Under the Commodity Futures Modernization Act of 2000, security futures fall within a joint CFTC-SEC framework. In addition to obtaining designated contract market, or DCM, status from the CFTC, a platform must also complete SEC registration under the rules for security futures trading venues.
The lawsuit turns on how equity perpetuals should be defined
The complaint filed by CMA asks a basic classification question: are equity perpetuals security futures, or are they security-based swaps?
The CFTC treated them as security futures, which places them under a shared CFTC-SEC regime. CMA argues that products with no fixed maturity and periodic funding payments used to maintain price alignment are, in substance, closer to security-based swaps.
That distinction carries real consequences. In the U.S. regulatory system, security-based swaps face tighter limits, and selling them to ordinary retail investors comes with specific legal obstacles. If the court agrees with the plaintiffs and classifies equity perpetuals as security-based swaps, the current path used to bring these products to market would face a fundamental challenge.
Why traditional market firms are pushing back
Behind the legal argument sits a direct commercial conflict. According to the source, Cboe and Citadel Securities are trying to prevent equity perpetuals from cutting into the business moat around their existing franchises.
For Cboe, options are a major profit engine. In the third quarter of this year, its options business generated net revenue of nearly $470 million, up 23% year over year. Its exchanges accounted for 30.5% of total U.S. options market volume. Trading fees are only part of that business. Market data, connectivity services and related clearing also contribute to revenue.
Equity perpetuals could overlap with options demand. The source gives a Tesla example: an investor who wants leveraged long exposure has traditionally needed to buy call options and manage expiration dates, implied volatility and strike selection. With an equity perpetual, that trader could open a long position to get direct price exposure without dealing with roll management or expiry.
For users focused on short-term trading or leveraged directional bets, the two products can serve similar needs. If equity perpetuals gain traction, retail options volume could be among the first areas to feel the diversion.
For Citadel Securities, the pressure would fall on market making. The firm has about a 30% share of market making in the U.S. options market and handles 35% of U.S. retail stock trading volume, according to the source. Its model depends on order flow from traditional broker channels and on established pricing and hedging systems.
If more retail traders shift to crypto platforms to trade equity perpetuals, that order flow could bypass traditional routes. That would weaken both market-making revenue and pricing influence. The source points in particular to after-hours and weekend periods, when perpetual venues could form their own quotes and executions, creating what it describes as a second price-discovery venue during times when traditional markets are inactive.
The fight also reaches compliance costs and regulatory symmetry
A deeper concern is whether the regulatory burden is being applied evenly. Traditional stock and options exchanges operate under long-standing SEC oversight and bear substantial compliance costs. If centralized exchanges can launch products with similar economic functions through a CFTC DCM qualification plus SEC registration, incumbent firms argue that new entrants would gain room for regulatory arbitrage.
In comments submitted to the SEC, Cboe said an incorrect product classification would leave space for new entrants to engage in what it called regulatory arbitrage.
Cboe Chief Executive Officer Craig Donohue said that if this were only a business issue, Cboe could launch a similar product on its own CFTC-regulated trading and clearing platform. Cboe already has futures trading and clearing infrastructure. Its Cboe Clear U.S. unit holds DCO status, and in October this year it also received temporary SEC registration approval for securities clearing. In that framing, the company is not arguing that it lacks the ability to compete. It is arguing that it does not want to compete under rules it sees as uneven.
That is why the lawsuit looks less like an attempt to ban a new product outright and more like a defensive move. A win could revoke the current approvals and force regulators to raise the bar. A loss could still slow implementation through the court process and buy time for incumbent firms to prepare their own response.
Market adoption is still a separate question
Perpetual futures introduce a new trading mechanism, and crypto markets have already shown that users want to trade them. Even so, whether equity perpetuals can establish themselves in U.S. markets will still depend on liquidity, trading costs, investor protection and clear, stable rules.
The CFTC has opened the door to the market. Winning permission to trade and winning the market itself are not the same thing.
