Coinbase and Partners Support CFTC Oversight of Single-Stock Perpetual Futures

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Leading crypto companies such as Coinbase, Kalshi, and Payward (Kraken's parent company), along with DRW Holdings, Jump Trading, and Paradigm, have filed a request with a federal court. They seek permission to file an amicus curiae brief supporting the Commodity Futures Trading Commission's (CFTC) oversight of single-stock perpetual futures in the US. This proposed brief addresses a lawsuit filed by the Capital Markets Alliance (CMA), which seeks to overturn the CFTC's approval of these products. The CMA argues that perpetual contracts on stocks, due to their lack of a fixed expiration date, should be classified as security-based swaps, which are not permitted to be traded on CFTC-regulated exchanges. The supporting companies emphasize that the SEC was involved in the regulatory process from the outset, and both the SEC and CFTC jointly solicited public comments. A ruling upholding the CFTC's approvals would help preserve a path for these companies to introduce or expand these products in the US. Perpetual futures allow traders to speculate on asset price movements without owning the underlying asset and, unlike traditional futures, have no expiration date. It is important to note that these instruments are not company stock, convey no ownership claim, and are not an official company valuation.