The CFTC and SEC are seeking public input on crypto derivatives rules amid a lawsuit from the CME Group over perpetual futures.
The Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) are soliciting public feedback on defining swaps and other derivatives in light of an ongoing dispute with the Chicago Mercantile Exchange (CME Group).
On June 17, CME Chairman Terrence Duffy announced a lawsuit against the CFTC after the agency approved perpetual futures from Kalshi, a platform for prediction markets.
The regulatory agencies' objective is to refine rules governing innovative financial products, assessing if existing regulations are adequate for the constantly changing market landscape. CFTC Chairman Michael Selig emphasized that these efforts aim to remove legal ambiguities from the Dodd-Frank Act that could impede fair market competition.
SEC Chairman Paul Atkins remarked that a review of event contract regulations has been overdue. The agencies will collect feedback for a period of 60 days.
A CFTC representative described CME's lawsuit as "unfounded," suggesting that major players are resistant to competition and are resorting to legal challenges to stifle progress.
Additionally, representatives from the decentralized exchange Hyperliquid expressed concern that CME, which dominates approximately 92% of the US derivatives market, is attempting to preserve its monopoly.
"Americans have been going offshore for years to trade perpetual futures. This is the first truly new product on the regulated US market in a decade. Competition benefits users, and innovation deserves clear rules," stated the Hyperliquid Policy Center.
Notably, the CFTC earlier acknowledged an error in its lawsuit against Gemini, admitting that the previous management's approach was inappropriate.
