Six of the biggest names in digital-asset trading have lined up behind the U.S. derivatives regulator in a court fight that could determine whether Americans can trade stock perpetual futures — a new type of contract that lets traders bet on stock prices without owning the actual shares or setting an end date on their position.

On November 9, 2026, six firms filed a legal brief supporting the Commodity Futures Trading Commission (CFTC) in a lawsuit that threatens to block the product before it launches. The six firms are Coinbase, Kalshi, Payward (the parent company of Kraken), DRW Holdings, Jump Trading, and Paradigm Operations. The legal, regulatory and filing details below were reported by Crypto.news, Blockonomi and Crypto Briefing; the SEC position described below remains unconfirmed.

What Are Stock Perpetual Futures?

A stock perpetual future is a derivative contract, meaning its value is tied to an underlying asset — in this case, a single stock such as Apple or Tesla. Unlike a standard futures contract, it has no expiration date. A trader can hold the position for as long as they want, or until their margin runs out. Holding the contract is not the same as owning a share of the company.

Traders use leverage, meaning they put up only a fraction of the full position value as collateral, known as margin. If the trade moves against them, they can be liquidated, which means the position is automatically closed and the trader loses that collateral. This is a meaningful risk that is different from simply buying a share of stock.

To keep the contract price close to the actual stock price, perpetual futures use a mechanism called a funding rate. Traders on the winning side of a price gap periodically pay a small fee to traders on the losing side. This constant balancing act keeps the futures price anchored to its reference market. Crypto traders are already familiar with the mechanism: Bitcoin and Ethereum perpetual futures have worked this way on offshore exchanges for years. Stock perpetual futures extend that same concept to individual company stocks.

Three exchanges — Coinbase Derivatives, KalshiEX, and Bitnomial — submitted applications to offer these contracts to U.S. customers on September 18, 2026. Under CFTC Regulation 40.3, a 45-day self-certification review period applies. Under self-certification, an exchange attests that a new product complies with CFTC rules, and the contract can list unless the agency objects during that window. No objections were filed, so the applications were deemed approved when that window closed on November 2, 2026. It is worth noting that Payward, Kraken's parent company, acquired Bitnomial earlier in 2026, meaning Kraken's corporate family now controls one of the three approved exchanges.

Why Coinbase, Kalshi and Kraken Are Defending the CFTC

Technically, these firms are not suing the CFTC. They are defending it. The lawsuit was filed on November 2 and 3, 2026, by the Capital Markets Alliance, a group backed by Cboe Global Markets and Citadel Securities, two major Wall Street derivatives operators. The case is Capital Markets Alliance Association v. CFTC, No. 1:26-cv-09608-LGS, filed in the U.S. District Court for the Southern District of New York.

The Capital Markets Alliance argues that stock perpetual futures are not "security futures" under the Commodity Futures Modernization Act of 2000. That 2000 statute established the split in derivatives oversight between the CFTC and the SEC, so how a contract is classified determines which regulator's rules and restrictions apply. Instead, the plaintiffs claim they are "security-based swaps," a category that falls under the Securities and Exchange Commission (SEC) rather than the CFTC. Security-based swaps are banned for retail investors under existing law, which is the core of the plaintiffs' objection.

Chris Iacovella, CEO of the American Securities Association, put it plainly: "By labeling stock perps as security futures, the CFTC sidestepped the SEC's jurisdiction and Congress' ban on selling security-based swaps to retail investors," according to Blockonomi reporting.

Craig Donohue, CEO of Cboe, framed the lawsuit as a matter of oversight rather than competition: "This issue is about investor protection for securities trading and the rule of law," he said, as reported by Blockonomi. Cboe itself operates a large derivatives exchange and would face new competition if stock perpetual futures are allowed to trade on crypto-native platforms.

The legal argument turns on a specific detail about the product's structure: perpetual contracts have no "specified future date" for delivery or settlement. U.S. District Judge Valerie Caproni denied an emergency request to block the products immediately on November 3, but she signaled that the plaintiffs may have a valid point about whether a no-expiry contract can legally qualify as a "future" under the statute.

The six firms that filed the amicus brief on November 9 argue the opposite: that the CFTC acted within its authority and that blocking these products would harm U.S. markets. An amicus brief is a filing by non-parties to a case who want to offer arguments for the court's consideration, so the six firms are backing the CFTC's position without becoming formal parties to the lawsuit. The CFTC classifies the contracts as security futures subject to joint CFTC and SEC oversight, not as the SEC-only security-based swaps the plaintiffs describe. The SEC separately filed its own amicus brief, reportedly taking no position while indicating it wanted a 60-day review period, according to unconfirmed reports cited by Crypto Briefing.

The case is not an isolated dispute. CME Group filed a separate lawsuit in June 2026 challenging CFTC approval of crypto perpetual futures offered by Kalshi and Coinbase, making the same core argument: that contracts without an end date cannot be "futures" by definition. That parallel case means the CFTC's entire framework for perpetual products, not just the stock version, faces legal challenge.

What the Case Could Mean for Traders and U.S. Markets

If the plaintiffs win, the three approved exchanges would likely be blocked from launching stock perpetual futures in the United States. Traders who want this exposure would have to use offshore platforms, which many already do for crypto perpetuals on venues operating outside the U.S. regulatory framework. The U.S. market would remain on the sidelines of a product category that already exists internationally.

If the CFTC and the six supporting firms prevail, Coinbase Derivatives, KalshiEX, and Bitnomial could move forward with their platforms. The products would operate under joint CFTC and SEC oversight as security futures, with leverage and margin rules applying. This would be the first time U.S.-regulated venues offered this type of contract to retail participants.

The broader precedent matters for the crypto industry as well. Coinbase and Kraken have both been expanding into regulated stock-linked products, and a loss in this case could constrain that strategy. Kraken, separately, already lets eligible users use tokenized stocks for leveraged crypto trades, illustrating how much overlap now exists between traditional securities and crypto-native platforms.

For now, the immediate effect on market participants is limited, because these products are not yet live. But the outcome will shape whether U.S. exchanges can eventually offer a wider range of stock-linked derivatives — and which regulator, the CFTC or the SEC, sets the rules for them. Developments worth watching include how the court ultimately handles the "specified future date" question, whether the SEC's requested 60-day review period shapes its role in the case, and how the parallel CME lawsuit over crypto perpetuals is resolved — all of which bear on how perpetual-style products can be regulated in the United States. Legal outcomes remain uncertain.

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk.