The SEC and CFTC have jointly requested public comment on whether existing derivatives definitions—swaps, security-based swaps, mixed swaps, and novel products—still reflect today's market. The comment window opens for 60 days after publication in the Federal Register. The move lands in the middle of a legal fight: CME Group filed a lawsuit challenging the CFTC’s approval of perpetual futures contracts for event-contract platforms like Kalshi and Coinbase.
CME's legal challenge
CME argues that perpetual futures—contracts without expiration and with periodic funding mechanics—should be classified as swaps, not futures. That classification determines venue rules, clearing obligations, reporting requirements, and who can offer the product in the U.S. The exchange's lawsuit targets the CFTC's approval directly, though the joint agency request wasn't framed as a response to the case. The timing, though, overlaps.
Swap vs futures: a regulatory divide
The difference between a swap and a futures contract is more than semantics. Swaps fall under different trading and clearing mandates, and the agencies that oversee them split along jurisdictional lines. The SEC and CFTC are asking whether current frameworks capture the way markets actually work now—not just for crypto, but across asset classes. The request signals they see cracks in the old definitions.
Crypto's offshore perpetuals market
Crypto markets rely heavily on perpetual futures, funding rates, collateralized positions, and synthetic exposure. Most of that activity sits offshore, outside U.S. regulated venues. If the SEC and CFTC decide that perpetuals are swaps, a wave of products could become subject to U.S. rules—or stay abroad. Either way, the outcome will affect whether more crypto derivatives activity moves onshore.
Comment window and next steps
Interested parties have 60 days from the Federal Register publication to submit comments. The agencies haven't signaled what they'll do with the feedback. The CME lawsuit will run on its own timeline. For now, the question is simple: do the legal definitions of half a century ago still fit the products traders actually use today?
