The Commodity Futures Trading Commission approved KalshiEX's BTCPERP contract on May 29 — one day after the exchange submitted it under Regulation 40.3. The product, a perpetual futures contract referencing spot Bitcoin with up to 50-to-1 leverage and automatic liquidation, marks the first time a U.S. regulated exchange has offered such a contract directly to retail investors. Within weeks, Kalshi recorded over $5 billion in perp volume.
CME vows to sue over classification
CME Group CEO Terry Duffy didn't wait long to respond. He announced the company would sue the CFTC, arguing the regulator misclassified BTCPERP as a futures contract when it should be treated as a swap. The distinction matters: swaps fall under a different regulatory framework, and CME contends the CFTC skipped the proper rulemaking process. Shares of CME, Cboe, and ICE all fell on the approval news — a sign the market sees Kalshi's product as a direct competitive threat to the incumbents' own Bitcoin derivatives.
Regulatory pushback from multiple fronts
The Futures Industry Association and its Principal Traders Group urged the CFTC to establish clearer definitions and a formal rulemaking process before approving more perpetual derivatives. Separately, a bipartisan coalition of 41 state attorneys general told the CFTC that sports-related event contracts should remain under state authority — a warning shot aimed at the agency's growing embrace of prediction-market products.
The CFTC has not backed down. On June 10 it proposed new event-contract rules, with comments due July 27. It also sued New Mexico to block the state from enforcing its own laws against CFTC-registered contract markets. The message: the agency intends to set the rules for these products, not the states.
Perpetual futures go mainstream — and onchain
Kalshi and Coinbase have now brought regulated crypto perpetual futures onshore for U.S. investors through domestic exchanges, ending a long stretch where Americans could only access such products offshore. The demand is clear. A separate product — SpaceX pre-IPO perps — generated about $3.2 billion in volume and $390 million in open interest across eight exchanges between May 17 and June 10, with Binance alone accounting for $2.1 billion. Polymarket's website now advertises perps directly with early-access invitations. Hyperliquid moved through its HIP-4 governance proposal to add outcome markets for off-chain events like U.S. inflation data and Federal Reserve decisions.
What comes next
The comment period for the CFTC's proposed event-contract rules closes July 27. Meanwhile, the lawsuit from CME will test whether the agency's fast-track approval under Regulation 40.3 can survive judicial scrutiny. The CFTC's decision to sue New Mexico also sets up a federal-state clash over who gets to police these markets. For now, the perp train has left the station — but the tracks are still being laid.
