Coinbase, Kalshi and Kraken Parent Fight Bid to Block U.S. Stock Perpetuals

Coinbase, Kalshi and Kraken parent Payward are asking a New York federal court for permission to oppose an injunction that could block U.S. listings of single-stock perpetual futures.

Their proposed brief, dated Nov. 9, backs the Commodity Futures Trading Commission (CFTC). The challenger is the Capital Markets Alliance Association, an industry group whose members include Cboe and Citadel Securities.

On Nov. 3, U.S. District Judge Valerie Caproni denied an emergency halt because the alliance had not shown imminent, irreparable harm. Her preliminary assessment nevertheless favored the group’s claim that the CFTC had exceeded its authority.

Six Firms Seek to Defend Newly Cleared Listings

DRW Holdings, Jump Trading and Paradigm Operations joined the three companies in asking to submit an amicus brief, allowing them to present arguments without becoming parties to the lawsuit. Coinbase lawyer Molly Abraham disclosed the request on Nov. 10.

The companies have a direct commercial interest in the outcome. Coinbase Derivatives, KalshiEX and Payward-owned Bitnomial applied on Sept. 18 to list perpetual contracts tied to major U.S. stocks. Their applications were thought to be approved on Nov. 2 after the CFTC’s review period ended without any action being taken to stop them.

The proposed brief argues that the requested preliminary injunction would prevent those venues from listing the products. DRW, Jump and Paradigm say they participate in, or are exploring, the equity-perpetuals market.

For traders, these contracts offer exposure to rising or falling stock prices without owning shares or repeatedly replacing expiring futures. Kalshi announced its U.S. launch on Nov. 5, covering more than 50 companies, including McDonald’s, Palantir and Meta.

No Expiration Date Sits at the Center of the Legal Fight

The alliance argues that contracts with no fixed expiration date should be treated as security-based swaps under Securities and Exchange Commission (SEC) oversight. In its view, the CFTC allowed the products onto exchanges under the wrong legal framework.

The companies disagree. They argue that the law requires future delivery, not delivery on a predetermined date, and that cash settlement when a trader closes a position satisfies that requirement. They also point to standardized contracts, margin requirements and central clearing as features shared with conventional futures.

Funding payments help keep perpetual prices linked to the underlying stock. The firms argue that removing the expiration date changes how traders maintain their exposure, without taking the contracts outside the existing security-futures framework.

The disagreement also reaches beyond legal definitions. The alliance has raised concerns about manipulation and effects on underlying stock prices, while the companies argue that joint supervision by the CFTC and SEC already addresses those risks.

CFTC Says SEC Oversight Remains Part of the Framework

In its Nov. 3 announcement, the CFTC said the contracts could begin trading on designated contract markets that also hold SEC notice registration to trade security futures. The products remain subject to both federal securities and commodities laws.

The companies cite the SEC’s participation in consultations and exchange filings to challenge the suggestion that it was pushed aside. In a post on X on November 10, Coinbase’s Ryan VanGrack noted that trading was already taking place elsewhere:

“Global markets are already trading equity perps. The question isn’t whether they exist, but where.”

Their brief also argues that treating the contracts as security-based swaps would shut off the existing route to U.S. retail trading and push activity offshore.

Judge Questions Whether Perpetuals Qualify as Security Futures

In her Nov. 3 order, Caproni focused on whether the contracts met the legal definition needed for their approval:

“The perpetual contracts in question do not appear to satisfy the definition of a security future.”

The order left the approvals in place and set a separate briefing schedule for the preliminary-injunction request. The alliance’s reply is due Nov. 10.