Hyperliquid Policy Center Challenges CME Lawsuit With Two Legal Arguments
Key Takeaways
- •The Hyperliquid Policy Center filed an amicus brief asking a federal court to dismiss CME Group's lawsuit against the CFTC's approval of a Kalshi Bitcoin perpetual futures contract, with representation from former U.S. Solicitor General Elizabeth Prelogar.
- •The policy group argues CME lacks standing because the CFTC's approval expanded access to perpetual futures rather than intensifying competition, and Kalshi has operated as a CFTC-regulated exchange since 2020.
- •The filing asserts CME's claims fall outside the Commodity Exchange Act, which the group says promotes responsible innovation, fair competition, transparency, and regulatory oversight.
- •CME's lawsuit contends that crypto perpetuals should be classified as swaps rather than futures, while the CFTC has separately sought dismissal by arguing CME can offer similar products itself.
- •The court's decision could influence how perpetual futures and other blockchain-based derivatives develop within regulated U.S. markets.
The Hyperliquid Policy Center has asked a U.S. federal court to dismiss CME Group’s lawsuit against the Commodity Futures Trading Commission’s approval of cryptocurrency perpetual futures on a U.S.-regulated exchange.
In an amicus brief filed Wednesday, the policy group identified what it described as two central flaws in CME’s case. Former U.S. Solicitor General Elizabeth Prelogar, now with Cooley LLP, represented the group in the filing. The dispute concerns the CFTC’s approval of a Bitcoin perpetual futures contract offered by Kalshi.
Standing Argument Challenges CME’s Lawsuit
The first argument addresses whether CME has suffered an injury that gives it legal standing to bring the lawsuit.
The Hyperliquid Policy Center said CME appears to rely on competitor standing. That doctrine generally requires government action to intensify competition in an existing market and cause an economically direct injury to the party suing.
According to the policy group, the CFTC’s decision had the opposite effect. Rather than dividing a fixed market, the approval expanded access to perpetual futures and could attract traders who had not previously participated in traditional dated futures.
The filing also contends that the CFTC did not introduce a new competitor into the market. Kalshi, it noted, has operated as a CFTC-regulated exchange since 2020.
Policy Center Disputes CME’s Commodity Exchange Act Claims
The second argument questions whether CME’s interests fall within the protections of the Commodity Exchange Act, or CEA.
The policy center said the law supports responsible innovation and fair competition among exchanges. It also argued that the CEA provisions governing swaps were designed to improve transparency and regulatory oversight.
CME’s effort to prevent a rival from introducing an innovative product conflicts with those objectives, according to the filing.
The dispute may affect the development of U.S. derivatives markets. The CFTC has increasingly explored bringing blockchain-based financial markets onshore, including markets that trade, clear and settle through public blockchains.
CME’s lawsuit challenges the regulatory classification of perpetual contracts and argues that crypto perpetuals should be treated as swaps rather than futures. The CFTC has separately asked the court to dismiss the case, arguing that CME can offer similar products itself.
The court’s ruling could influence the development of perpetual futures and other blockchain-based derivatives within regulated U.S. markets.
