A policy group backed by the largest offshore perpetuals venue has retained one of the most senior appellate lawyers in the United States to argue against CME Group.
Former Solicitor General Elizabeth Prelogar, now at Cooley LLP, filed the brief for the Hyperliquid Policy Center on September 9, urging the court to throw out CME’s challenge to the CFTC.
The filing came in the US District Court for the District of Columbia, where CME is contesting the first perpetual futures contract approved for a US-regulated exchange in Chicago Mercantile Exchange Inc. v. Selig, case 1:26-cv-02157, before Judge Colleen Kollar-Kotelly.
The Two Arguments
The brief raises what it calls two defects in CME’s suit.
On standing, it argues CME relies on the doctrine of competitor standing, which applies only where government action intensifies competition within a fixed market so that injury follows as a matter of economic logic. The CFTC’s order did neither, according to the brief: it enlarged the market rather than dividing it, opening exchanges to participants who would not have traded dated futures, and added no new competitor because Kalshi has been a CFTC-regulated exchange since 2020.
On the zone of interests, the brief argues CME’s position falls outside what the Commodity Exchange Act protects. It points to the statute’s stated purposes, which include promoting responsible innovation and fair competition among exchanges, and to swap provisions enacted to bring transparency to an opaque market—arguing CME’s interest in blocking a rival’s innovation frustrates each objective.
It Echoes the CFTC’s Own Motion
The arguments track the regulator’s. The Crypto Times reported on September 3 that the CFTC had asked the court to dismiss, describing the suit as much ado about nothing and CME’s claimed injuries as entirely self-inflicted, noting that CME does not argue it could not list the same contract itself.
The Hyperliquid brief makes the same point commercially rather than legally: the CFTC’s order confirmed that every US derivatives exchange, CME included, can list this type of contract, and CME has so far chosen not to.
What the Group Says Is at Stake
Beyond this case, the brief argues CME advances a theory under which an incumbent exchange is injured whenever its regulator permits a product the incumbent declines to offer. If that succeeded, it contends, every CFTC approval would invite litigation from firms preferring the status quo.
The brief names the interest directly. It notes the CFTC is working to bring on-chain markets that trade, clear, and settle on public blockchains onshore, citing Hyperliquid by name, and argues each would face the same challenge from any incumbent that declines to adopt it.
That is worth reading as the position of an interested party. The Hyperliquid Policy Center is a Washington-based body established this year around a protocol whose core business is perpetual futures.
The Underlying Dispute
The case turns on classification. The Crypto Times reported CME’s intention to sue in June, after chief executive Terry Duffy argued perpetual contracts are swaps under the Dodd-Frank Act rather than futures and described them as a disaster waiting to happen. Swaps and futures carry different margin, reporting, tax, and eligibility requirements.
The CFTC issued its order in May allowing Kalshi to list a Bitcoin perpetual as a futures contract, confirming that any US derivatives exchange may list a similar contract referencing a digital asset without prior approval, alongside a policy statement advising exchanges to seek approval before listing perpetuals on other asset classes.
The brief puts global perpetuals’ notional volume last year at nearly $90 trillion, none of it on a US-regulated exchange accessible to Americans.
The Competitive Backdrop
CME’s position has drawn criticism from the industry since filing. Jake Chervinsky called the suit a shocking miscalculation that exposed CME as an incumbent afraid of competition, noting its own perpetuals volume on the day of filing was under $6 million, less than 1% of Kalshi’s.
Kalshi’s Bitcoin perpetual generated over $100 million in first-day volume and reached $1 billion notional within a week.
