CFTC files to dismiss CME lawsuit over crypto perpetual futures

The US Commodity Futures Trading Commission (CFTC) has filed a motion to dismiss a civil suit filed by the Chicago Mercantile Exchange (CME) Group, which claimed that the regulator’s treatment of cryptocurrency “futures” as “swaps” went against Congress.

In a Wednesday filing in the US District Court for the District of Columbia, lawyers representing CFTC Chair Michael Selig and the commission requested a hearing to address the motion to dismiss the CME lawsuit, claiming the group lacked standing. 

CME filed suit against the CFTC in June after the commission approved perpetual futures contracts tied to the spot price of Bitcoin (BTC) for prediction markets platform Kalshi and issued a no-action position for similar products on cryptocurrency exchange Coinbase. The June complaint argued that Selig had unilaterally acted without a full panel of five commissioners, going against the Commodity Exchange Act by treating “futures” as “swaps” with expiration dates.

The CFTC said that the group could not make a “concrete showing that it is in fact likely to suffer financial injury,“ saying that “any CFTC-registered exchange can list perpetual futures on digital assets.“

“This lawsuit is much ado about nothing,” said the filing. “CME claims to be injured by a CFTC order authorizing ’perpetual futures contracts’ on digital assets like bitcoin [...] as well as a policy statement concerning perpetual futures more generally [...] CME does not argue that it could not list this same type of futures contract.”

The motion added:

“[...] CME has not alleged, and cannot plausibly allege, that it suffered a financial injury from the CFTC’s authorization of perpetual futures contracts. CME therefore lacks standing.”

A CFTC spokesperson told Cointelegraph in response to the initial lawsuit that CME had engaged in “lawfare.” The agency called the June complaint “frivolous.”

Selig and the CFTC requested an oral hearing to address the motion, which had not been scheduled on the public docket as of Thursday.