A federal judge denied an emergency halt on stock perpetual futures Nov. 3 but ruled the Capital Markets Alliance Association "is likely to succeed on the merits" in proving the CFTC exceeded its authority. U.S. District Judge Valerie Caproni wrote that perpetual contracts on individual stocks "appear to satisfy the definition of a swap" under SEC jurisdiction, not futures. Stock perps from Kalshi, Coinbase Derivatives, and Bitnomial remain live. The CFTC's opposition is due Nov. 6, with the alliance's reply due Nov. 10.

Caproni's reasoning cuts at crypto perpetuals. She wrote that contracts "by definition" lacking "a sale for future delivery" cannot be security futures under CFTC authority. CME Group sued the CFTC in June in Washington arguing bitcoin perpetuals are swaps because they run on funding payments rather than delivery. The New York order covers security futures, but a federal judge has now said a contract with no expiration does not look like a future.

The alliance is a New York nonprofit whose members include Cboe Global Markets, Citadel Securities and Healthy Markets Association, according to a declaration from secretary Adam Ford. The group sued the CFTC and Chairman Michael S. Selig in case No. 1:26-cv-09608, seeking to undo approvals of filings by all three exchanges. Kalshi listed four single-stock perps on Qualcomm, McDonald's, Amgen and Costco by Wednesday morning with maximum leverage of 4.9 times.

Caproni denied the temporary restraining order because declarations from Cboe, Citadel Securities and Healthy Markets were "conjectural" about harm and did not show irreparable harm that was "actual and imminent." She found the balance of equities and public interest favor the alliance, writing that the CFTC's actions "seem to represent a major disruption to the equities market." The order leaves approvals in place and does not decide the case or the alliance's separate motion for a preliminary injunction.

The exchanges filed Sept. 18, and the CFTC let its 45-day review period lapse without a written order. Chairman Selig's Nov. 3 statement said the contracts were deemed approved under Regulation 40.3 as security futures products. The alliance's complaint says the CFTC "invited a parallel, synthetic market in U.S. stocks to grow outside the exclusive jurisdiction" of the SEC. A CFTC spokesperson told Reuters the lawsuit is "troubling" and said "our markets should be governed by law, not litigation campaigns intended to block innovation."

Source: Bitcoin_Magazine