Their brief argues that a security future cannot be a swap, so the only question is whether equity perpetuals are security futures. It also states that the contracts are now trading, a week after a clearance that named no exchange and no start date.
Coinbase, Kalshi, Payward and three trading firms asked a Manhattan federal court on November 9 to let them defend the Commodity Futures Trading Commission's clearance of perpetual futures on individual US stocks. Their brief, filed as docket entry 47-1 in Capital Markets Alliance Association v. Commodity Futures Trading Commission in the US District Court for the Southern District of New York, case 1:26-cv-09608, supports the agency's opposition to the trade association's motion for a preliminary injunction.
The six amici are Coinbase, Kalshi, Payward, which owns Kraken, DRW Holdings and Jump Trading, which filed jointly, and Paradigm Operations, the crypto venture firm. Each brought its own outside counsel: Gibson, Dunn & Crutcher for Coinbase, Dechert for Kalshi, Morrison & Foerster for Payward, Willkie Farr & Gallagher for DRW and Jump, and Cahill Gordon & Reindel for Paradigm. Affiliates of two of them, Coinbase Derivatives and KalshiEX, are among the three exchanges whose listing applications the CFTC cleared, so they have a direct commercial stake in whether the approvals survive.
The argument is deliberately narrow. “A security future—by definition—cannot be a swap,” the brief says in its introduction. Its first heading states that the only relevant statutory question is whether equity perpetuals are security futures, the second that they are security futures under the Commodity Exchange Act, and the third that policy concerns are irrelevant and in any event weigh against the relief the alliance is asking for.
One sentence in the brief marks a change from where the dispute stood a week ago. “The SEC's role continues now that equity perpetuals are trading,” the amici write. When the CFTC cleared the contracts on November 3, Chairman Michael Selig's statement named no exchange, no stock and no start date, and no exchange had said when a single-stock contract would list. The brief does not name an exchange or a stock either, and it is a filing by firms whose affiliates applied to list the products rather than a court finding or an exchange notice.
The amici's jurisdictional case rests on steps the Securities and Exchange Commission has already taken. “Each exchange also filed its security futures listing standards with the SEC, which published them for public comment,” the brief says, and a footnote adds that the agency “thus has a direct hand in limiting the leverage available on equity perpetuals,” citing the margin rules at 17 CFR 41.45 and 242.403. That answers the alliance's central claim, which is that a contract without an expiration date is a security-based swap, a category under the SEC's exclusive jurisdiction that cannot be listed on a CFTC-regulated exchange at all.
The Capital Markets Alliance Association, a New York trade group whose members include Cboe Global Markets and Citadel Securities, brought the case in the first days of November and asked the court to vacate the approvals, to declare the products security-based swaps and to bar the CFTC from giving the approvals effect while the case is pending. Its complaint runs through the Administrative Procedure Act and argues that the agency offered no adequate explanation and did not weigh the effects on investors and securities markets. Those are allegations in a complaint, and no court has ruled on them.
The alliance has already lost one round. The court denied its request for a temporary restraining order on November 3, crypto.news reported, finding no sufficiently immediate harm while questioning whether perpetual contracts meet the security futures definition at all, since they do not provide for delivery on a set future date. The same report puts the CFTC's opposition brief due on November 6 and the alliance's response scheduled for November 10, the day after the amici asked to be heard. The approvals remain in place.
The applications at issue came from Coinbase Derivatives, KalshiEX and Bitnomial Exchange, each filed on September 18, and were deemed approved under Commission Regulation 40.3. Deemed approval is not an affirmative vote; a product clears when its review window closes without a notice of non-approval. Index perpetuals reached US exchanges by the same route, and Kalshi listed a perpetual future on an index of 500 large US companies in early October while its filings for single stocks were still pending.
Coinbase argued its position publicly as well as on the docket. Ryan VanGrack, a vice chairman at the company, wrote on X that “The U.S. should lead, not cede, this space,” in a post reported by both The Block and crypto.news. Molly Abraham, Coinbase's general counsel, argued there that security futures are not swaps under the Commodity Exchange Act and the securities futures framework Congress created in 2000.
The classification fight is older than this case. CME's exchange subsidiary sued the CFTC in June over the order that opened the door to perpetual futures on digital assets, on the same reasoning that a contract with no expiration date is a swap, and the agency has answered that suit with CME's own volume data. The alliance wants a court to extend the point to contracts on single stocks. The amici want it to answer one question instead, and to leave the products trading while it does.
