The Hyperliquid Policy Center (HPC) has filed an amicus brief in a U.S. District Court backing the Commodity Futures Trading Commission (CFTC) amid a legal challenge by the CME Group. The brief argues that the CME lacks legal standing to contest the CFTC’s approval of perpetual futures, a move HPC claims could hinder innovation in U.S. derivatives markets.
The CME Group initiated its lawsuit against the CFTC in June, objecting to the regulator’s authorisation of perpetual futures for Kalshi and Coinbase last month. HPC’s intervention asserts that allowing incumbent exchanges to litigate over new products could deter regulatory approval of innovative market structures.
Elizabeth Prelogar, former Solicitor General and legal counsel for HPC, stated in the brief that CME’s stance risks creating a precedent where “every product the CFTC approves will invite litigation from incumbents who prefer the status quo.” CME Group CEO Terrence Duffy has previously described perpetual futures as a “disaster waiting to happen,” arguing they undermine traditional market stability.
The CFTC’s decision to permit perpetual futures, which lack an expiration date, has drawn support from HPC, which highlighted their role in expanding market participation. The regulator’s approval follows its 2020 designation of Kalshi as a regulated exchange, marking a shift toward accommodating novel financial instruments.
The case hinges on whether the CME’s objections to the CFTC’s regulatory authority are legally valid. A ruling in favour of the CFTC could reinforce its oversight of emerging markets, while a CME victory may prompt further challenges to innovative products.
Written by Steven Cook
Regulation Desk
