Kalshi has filed an application with the CFTC to list a perpetual futures contract tracking US large-cap equities, specifically using the MerQube US Large Cap Index as a proxy for the S&P 500. The product would trade continuously throughout the week with daily funding settlements calculated during regular equity market hours. This follows Kalshi’s bitcoin perpetual futures approval in May, which generated over $5.5 billion in volume during its first two weeks, and recent applications for gold, silver, and copper perpetuals.
The expansion strategy comes amid ongoing litigation from CME Group, which is challenging the CFTC’s approval of Kalshi’s bitcoin perpetual in federal court. CME argues these products are swaps rather than futures and therefore fall outside the scope of what exchanges should offer under existing regulatory frameworks. Kalshi’s filings appear designed to support its position that perpetual contracts belong squarely within CFTC-regulated futures markets, citing Chairman Michael Selig’s stated objective of bringing offshore perpetual products into US regulated venues.
The timing is notable as BitMEX, which pioneered crypto perpetual swaps offshore in 2014, announced in July it would shut down by late September. This reinforces the CFTC’s push to onshore products that developed abroad due to regulatory uncertainty. For brokers and fintech firms, the outcome of CME’s lawsuit could fundamentally determine whether perpetual contracts become a standard regulated offering in US markets or remain confined to offshore venues.
FXnCO Insight
The legal classification of perpetual contracts as futures versus swaps will shape not just product innovation but also determine which firms can access this high-volume market segment domestically.
Source: Finance Magnates