Coinbase, Kalshi, and Kraken parent Payward moved for leave to file an amicus brief supporting the Commodity Futures Trading Commission. The intervention responds to a lawsuit initiated by the Capital Markets Alliance Association in the Southern District of New York.
The legal dispute aims to halt trading in perpetual derivative contracts linked to single stocks. Trading powerhouses including Jump Trading, DRW Holdings, and Paradigm joined the brief. The coalition argues that existing federal legislation properly classifies perpetuals as single-stock futures.
The litigation began through a federal court filing submitted by traditional market institutions including Cboe Global Markets and Citadel Securities. The alliance argues that the CFTC misapplied statutory authority over products requiring SEC jurisdiction.
The regulatory battle follows efforts where Coinbase files to list onshore derivative contracts under federal rules. Reclassifying perpetuals as security-based swaps would legally prevent retail participation.
On November 3, 2026, U.S. District Judge Valerie Caproni issued a temporary restraining ruling rejecting the plaintiffs’ emergency motion. While refusing to suspend operations, the court questioned whether expiration dates define security futures.
Plaintiffs argue that perpetual structures bypass core investor protections administered by securities regulators. In response, crypto venues maintain that the Commodity Futures Modernization Act framework mandates cooperative oversight.
The defense argument is detailed in the proposed amicus brief submitted by the industry coalition. The document highlights that funding rate mechanisms preserve parity with the underlying cash equities.
Concurrently, on-chain derivatives continue evolving as NEAR integrates Hyperliquid infrastructure to provide non-custodial perpetual settlement.
The briefing schedule scheduled the alliance’s response for November 10, 2026, before District Judge Lorna G. Schofield. The court will evaluate the preliminary injunction request in subsequent proceedings.
This article is for informational purposes only and does not constitute financial advice.
