Leading crypto and prediction market companies have once again lined up behind the U.S. Commodity Futures Trading Commission in ongoing legal battles against traditional financial firms seeking to stop perpetual futures trading in the U.S. After an earlier high-stakes clash with the CME Group over crypto perps, a new fight has emerged over stock perps, pitting the crypto industry against the securities industry.

In the stock perps dispute, the crypto industry has made the legal argument that perpetual futures tied to single stocks are not swaps, while Citadel Securities and others insist they are, which would mean the CFTC lacks authority to regulate them.

The regulator has moved to open a new route for single-stock perps, much as it did months earlier for crypto perps, and the traditional securities industry quickly responded with a lawsuit aimed at blocking it. That suit argues the agency is overreaching and wrongly classifying these products as futures rather than swaps. The latest arguments have come from Coinbase, Kraken and Kalshi, which maintain that the products are closely tied to securities futures and belong in the same regulatory category.

The Capital Markets Alliance, a newly formed group backed by Citadel Securities, Cboe and other traditional securities firms, has sued the regulator seeking an emergency halt. Its position is that single-stock perps, contracts with no expiration date that allow investors to speculate indefinitely on an equity's price movements, meet the definition of securities-based swaps and therefore fall under the Securities and Exchange Commission's jurisdiction.

This partly mirrors CME's argument that crypto perps are also swaps. Even so, in that case the CFTC would retain jurisdiction over the products, though they would have to be subject to very different rules than if they remained futures products.

Source: www.coindesk.com. Adapted by NBTC.