Stock Perpetual Futures: Why Coinbase, Kalshi and Kraken Are Backing the CFTC

A group of major crypto exchanges is backing the U.S. derivatives regulator in a court fight that could determine whether Americans can trade stock perpetual futures, a new type of contract that lets traders bet on stock prices without owning the actual shares or setting an end date on their position.

The legal, regulatory and filing details below are reported by Crypto.news, Blockonomi and Crypto Briefing; the SEC position described below remains unconfirmed.

On November 9, 2026, six firms filed a legal brief supporting the Commodity Futures Trading Commission (CFTC) in a lawsuit that threatens to block the product before it launches. The six firms are Coinbase, Kalshi, Payward (the parent company of Kraken), DRW Holdings, Jump Trading, and Paradigm Operations. For related coverage, see SEC and CFTC Set Five-Year Path for Tokenized U.S. Stocks.

What Are Stock Perpetual Futures?

A stock perpetual future is a derivative contract, meaning its value is tied to an underlying asset, in this case a single stock like Apple or Tesla. Unlike a standard futures contract, it has no expiration date. You can hold the position for as long as you want, or until your margin runs out. Context on this theme: Formation Securities Plans Solana Tokenized Stock Trading.

Traders use leverage, meaning they put up a fraction of the full position value as collateral (called margin). If the trade moves against them, they can be liquidated, which means their position is automatically closed and they lose that collateral. This is a meaningful risk that is different from simply buying a share of stock. More on this in Coinbase Gives Retail Investors Access to Oura IPO Before Trading.

To keep the contract price close to the actual stock price, perpetual futures use a mechanism called a funding rate. Traders on the winning side of a price gap periodically pay a small fee to traders on the losing side. This constant balancing act keeps the futures price anchored to its reference market. Crypto traders are already familiar with this mechanism; Bitcoin and Ethereum perpetual futures have worked this way for years on offshore exchanges.

Stock perpetual futures extend that same concept to individual company stocks. Three exchanges, Coinbase Derivatives, KalshiEX, and Bitnomial, submitted applications to offer these contracts to U.S. customers on September 18, 2026. Under CFTC Regulation 40.3, a 45-day self-certification review period applies. No objections were filed, so the applications were deemed approved when that window closed on November 2, 2026.

It is worth noting that Payward, which is Kraken’s parent company, acquired Bitnomial earlier in 2026, meaning Kraken’s corporate family now controls one of those three approved exchanges.

Why Coinbase, Kalshi and Kraken Are Backing the CFTC

Technically, these firms are not suing the CFTC. They are defending it. The lawsuit was filed on November 2 and 3, 2026, by the Capital Markets Alliance, a group backed by Cboe Global Markets and Citadel Securities, two major Wall Street derivatives operators. The case is Capital Markets Alliance Association v. CFTC, No. 1:26-cv-09608-LGS, filed in U.S. District Court for the Southern District of New York.

The Capital Markets Alliance argues that stock perpetual futures are not “security futures” under the Commodity Futures Modernization Act of 2000. Instead, the plaintiffs claim they are “security-based swaps,” a category that falls under the Securities and Exchange Commission (SEC) rather than the CFTC. Security-based swaps are banned for retail investors under existing law, which is the core of the plaintiff’s objection.

Chris Iacovella, CEO of the American Securities Association, put it plainly: “By labeling stock perps as security futures, the CFTC sidestepped the SEC’s jurisdiction and Congress’ ban on selling security-based swaps to retail investors,” according to Blockonomi reporting.

Craig Donohue, CEO of Cboe, framed the lawsuit as a matter of oversight rather than competition: “This issue is about investor protection for securities trading and the rule of law,” he said, as reported by Blockonomi. Cboe itself operates a large derivatives exchange and would face new competition if stock perpetual futures are allowed to trade on crypto-native platforms.

The legal argument turns on a specific detail about the product’s structure: perpetual contracts have no “specified future date” for delivery or settlement. U.S. District Judge Valerie Caproni denied an emergency request to block the products immediately on November 3, but she signaled that the plaintiff may have a valid point about whether a no-expiry contract can legally qualify as a “future” under the statute.

The six firms that filed the amicus brief on November 9 argue the opposite: that the CFTC acted within its authority and that blocking these products would harm U.S. markets. The CFTC classifies the contracts as security futures subject to joint CFTC and SEC oversight, not as the SEC-only security-based swaps the plaintiffs describe. The SEC separately filed its own amicus brief, reportedly taking no position while indicating it wanted a 60-day review period, according to unconfirmed reports cited by Crypto Briefing.

The case is not an isolated dispute. CME Group filed a separate lawsuit in June 2026 challenging CFTC approval of crypto perpetual futures offered by Kalshi and Coinbase, making the same core argument: that contracts without an end date cannot be “futures” by definition. That parallel case means the CFTC’s entire framework for perpetual products, not just the stock version, faces legal challenge.

What the Case Could Mean for Traders and U.S. Markets

If the plaintiffs win, the three approved exchanges would likely be blocked from launching stock perpetual futures in the United States. Traders who wanted this exposure would have to use offshore platforms, which many already do for crypto perpetuals. The U.S. market would remain on the sidelines of a product category that already exists internationally.

If the CFTC and the six supporting firms prevail, Coinbase Derivatives, KalshiEX, and Bitnomial could move forward with their platforms. The products would operate under joint CFTC and SEC oversight as security futures, with leverage and margin rules applying. This would be the first time U.S.-regulated venues offered this type of contract to retail participants.

The broader precedent matters for the crypto industry too. Coinbase and Kraken have both been expanding into regulated stock-linked products, and a loss here could constrain that strategy. Kraken, separately, already lets eligible users use tokenized stocks for leveraged crypto trades, illustrating how much overlap now exists between traditional securities and crypto-native platforms.

For anyone holding crypto or thinking about their first purchase, the immediate effect is limited. These products are not yet live. But the case will shape whether U.S. exchanges can eventually offer a wider range of stock-linked derivatives, and which regulator, the CFTC or the SEC, sets the rules for them.

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.