The Commodity Futures Trading Commission asked a federal judge Wednesday to dismiss the Chicago Mercantile Exchange's lawsuit challenging the agency's approval of cryptocurrency perpetual futures. The regulator argued that CME has failed to show it suffered any financial harm or faced increased competition as a result of the decision.

"This lawsuit is much ado about nothing," attorneys for CFTC Chairman Michael S. Selig and the commission wrote. The judge has not yet ruled on the motion, and the accompanying proposed order remains unsigned.

CME filed suit after the agency classified Kalshi's Bitcoin perpetual contract as a future. The exchange argues that a contract lacking an expiration or delivery date meets the Commodity Exchange Act's definition of a swap and therefore went through the wrong approval process. The classification question is more than semantic: futures and swaps fall under different regulatory pathways under the Commodity Exchange Act, with futures traded on CFTC-regulated designated contract markets while swaps are subject to a separate framework, so the label determines which approval process and market structure applies.

"CME does not argue that it could not list this same type of futures contract—indeed, the Order and Policy Statement clarify that any CFTC-registered exchange can list perpetual futures on digital assets," the CFTC wrote. "Nor does CME argue that the Commission lacked authority to approve the listing of this type of contract. Instead, it claims that the Commission should have labeled them as 'swaps' rather than 'futures.'"

Perpetual futures, commonly known as perps, allow traders to maintain leveraged long or short positions indefinitely, with funding payments between traders keeping contract prices aligned with the underlying spot market. The product was popularized on offshore crypto derivatives platforms, and its entry into the U.S. regulated market marks a shift in which products traditionally confined to unregulated venues are being brought under CFTC oversight.

Kalshi and Polymarket signaled plans to expand into perpetual futures in April. On May 29, the CFTC approved Kalshi's Bitcoin perpetual contract, bringing a product most commonly traded on offshore crypto platforms into the regulated U.S. market. Kalshi then filed to certify contracts tied to 12 altcoins, including Ethereum, XRP, Solana, and Dogecoin. CME announced its planned legal challenge on June 18.

The dispute may eventually extend beyond digital assets. Kalshi filed in August to list a perpetual future tracking copper prices, although the CFTC has said contracts based on asset classes outside digital commodities require individual review.

The agency's May order allows registered designated contract markets—not only Kalshi—to list similarly structured perpetual futures based on Bitcoin and other digital commodities. CME could therefore introduce competing contracts, the CFTC said.

The regulator also cited public comments from CME executives who said their customers had not requested perpetual futures and that the contracts were not substitutes for the company's institutional hedging products. In addition, it pointed to CME figures showing that August trading volume exceeded May volume for Bitcoin, Micro Bitcoin, Ethereum, and Micro Ethereum futures, presenting the data as evidence against CME's claim of competitive injury. The court has not assessed that conclusion.

The CFTC further argued that a ruling in CME's favor would not address the alleged harm, since exchanges could seek to certify the contracts as swaps or offer long-dated futures with similar mechanics.

"CME's failure to allege a financial injury notwithstanding, CME's own statements and data confirm that the company has suffered no financial injury and is not likely to imminently suffer one," the CFTC wrote. The outcome of the dismissal motion and, if the case proceeds, the broader litigation could shape how perpetual-style contracts are classified and listed in U.S. regulated markets going forward.