CME Group CEO Terry Duffy said crypto perpetual futures, or perps, should be classified as swaps rather than futures, a distinction that would place them under stricter rules introduced after the 2008 financial crisis. CME has already sued the U.S. Commodity Futures Trading Commission, arguing for that classification even as the regulator has said CME itself could list similar contracts.
Duffy’s case centers on the funding-rate mechanism used in perpetual contracts. Those payments between long and short traders are designed to keep contract prices aligned with spot markets, and Duffy argues that feature fits the definition of a swap. The position clashes with the CFTC’s earlier approval of prediction market platform Kalshi’s Bitcoin perpetual contracts as futures.
The case has not yet been decided. If a court dismisses the lawsuit for lack of standing, it would leave unanswered the core legal question of whether perpetual contracts should be treated as futures or swaps, allowing the current market structure to remain in place for now. The report was cited by Techub and attributed to BeInCrypto.
CME Group CEO Terry Duffy said crypto perpetual futures, or perps, should in substance be classified as swaps, a designation that would subject them to tighter rules put in place after the 2008 financial crisis.
The exchange led by Duffy has sued the U.S. Commodity Futures Trading Commission, or CFTC, to press for that classification, even though the regulator has said CME itself could also list similar contracts.
The dispute turns on the funding-rate structure
Duffy’s argument is based on the funding-rate mechanism used in perpetual contracts. Those payments between long and short positions are meant to keep the contract price tied to the spot price. He said that feature fits the definition of a swap.
CFTC previously cleared Kalshi’s Bitcoin perps as futures
The CFTC had earlier approved prediction market platform Kalshi’s Bitcoin perpetual contracts as futures, putting the regulator’s position at odds with CME’s view.
No ruling yet
There has been no decision in the case so far. If the court throws out the lawsuit for lack of standing, it would not rule on whether perpetual contracts are futures or swaps, and the current market status quo would remain in place.
The item was published by Techub and attributed to BeInCrypto.
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