Stock perpetual futures will remain available on Kalshi, Coinbase Derivatives, and Bitnomial for the time being after a federal judge denied an emergency motion to halt trading Tuesday, even as she signaled that the Wall Street-backed challengers are likely to prevail on their claim that the Commodity Futures Trading Commission exceeded its statutory authority.
U.S. District Judge Valerie Caproni denied the temporary restraining order on November 3 following a teleconference with the parties, just hours after the CFTC indicated the products could begin trading on U.S.-regulated exchanges.
The plaintiff, the Capital Markets Alliance Association—a New York nonprofit whose members include Cboe Global Markets, Citadel Securities, and the Healthy Markets Association—filed suit against the CFTC and Chairman Michael S. Selig in the Southern District of New York (Case No. 1:26-cv-09608), seeking to vacate the approvals granted to all three exchanges.
In her order, Judge Caproni wrote that the alliance “is likely to succeed on the merits” of its argument that the agency lacks statutory authority to permit perpetual derivatives on individual stocks to be offered to retail investors on CFTC-regulated platforms.
“Because the perpetual contracts, by definition, do not provide for a ‘sale for future delivery of a single security,’ they cannot be a security future over which the CFTC has statutory and regulatory authority,” she wrote.
Instead, the judge determined, the contracts “appear to satisfy the definition of a swap,” which would place them under the jurisdiction of the Securities and Exchange Commission.
She also found that the balance of equities and the public interest favor the alliance, writing that the agency’s actions “seem to represent a major disruption to the equities market.”
However, the request failed on a key prong. Caproni said the declarations from Cboe, Citadel Securities, and Healthy Markets were “conjectural” regarding the harm their members would suffer and did not demonstrate irreparable harm that was “actual and imminent.”
What the Ruling Does and Does Not Do
The order leaves the approvals in place. It does not decide the case or the alliance’s separate motion for a preliminary injunction.
The CFTC’s opposition is due Friday, November 6, and the alliance’s reply is due Tuesday, November 10, though the order notes that schedule is subject to change by the assigned judge. The docket lists Judge Lorna G. Schofield as assigned to the case.
By Wednesday morning, Kalshi was already listing four single-stock perpetuals—on Qualcomm, McDonald’s, Amgen, and Costco—with maximum leverage of 4.9 times.
Bloomberg Law reported that the judge signaled she might ultimately side with the Wall Street firms opposed to the products.
A CFTC-SEC Turf Battle With Crypto Venues Caught in the Middle
The dispute centers on a classification question. Chairman Selig’s November 3 statement said the contracts were deemed approved under Commission Regulation 40.3 as security futures products, a category the CFTC and SEC oversee jointly. The exchanges filed their applications on September 18, and the agency allowed its 45-day review period to lapse without issuing a written order.
The alliance argues that a contract with no expiration date and no delivery obligation constitutes a security-based swap. Congress restricted retail trading in such instruments to national securities exchanges under full SEC oversight.
Its complaint alleges the CFTC “invited a parallel, synthetic market in U.S. stocks to grow outside the exclusive jurisdiction” of the SEC.
A CFTC spokesperson called the lawsuit “troubling” and told Reuters: “Our markets should be governed by law, not litigation campaigns intended to block innovation.”
For crypto-native venues, the stakes extend beyond equities. Perpetuals are the core product of crypto derivatives trading, and Kalshi and Coinbase have leveraged the CFTC’s framework to bring them onshore.
The agency approved the first U.S.-listed bitcoin perpetual on May 29, and Kalshi launched the product shortly thereafter.
That approval already faces a separate challenge. CME Group sued the CFTC in June, arguing that a contract built on exchanged funding payments is a swap, not a future. That case remains pending in Washington.
The New York order addresses security futures, not commodities like bitcoin. Yet a federal judge has now indicated, at least preliminarily, that a contract with no expiration does not resemble a future.