Six crypto and trading industry participants filed a legal defense in the US District Court for the Southern District of New York on November 9, 2026. Coinbase, Kalshi, Kraken parent Payward, DRW Holdings, Jump Trading, and Paradigm Operations submitted a joint amicus brief supporting the Commodity Futures Trading Commission’s (CFTC) authority to regulate perpetual futures contracts based on single US company stocks.
The move puts digital market participants at the forefront of a jurisdictional dispute against conventional exchange groups.
Why Wall Street Is Taking the Dispute to Court
The dispute began when Coinbase Derivatives, KalshiEX, and Bitnomial Exchange submitted applications on September 18, 2026, to trade large-cap US stock perpetual contracts. Bitnomial itself was acquired by Payward earlier this year. The CFTC subsequently approved the products on November 2, 2026, through its product review mechanism.
On the very day the approval was issued, the Capital Markets Alliance Association filed a civil complaint under case number 1:26-cv-09608-LGS. Backed by major Wall Street players such as Cboe and Citadel Securities, the association accused the CFTC of overstepping its authority without adequate explanation and risking the erosion of investor protection and equity market integrity.
The Wall Street alliance argued that derivative contracts with no expiration date are not futures contracts, but rather security-based swaps subject to the jurisdiction of the Securities and Exchange Commission (SEC).
Legal Foundation and Denial of Emergency Injunction
The six supporting companies disputed that argument. In their amicus brief, they asserted that the Commodity Exchange Act (CEA) allows perpetual futures to fall under the valid security futures framework despite having no expiration date. They cited statutory language establishing that security futures, by definition, cannot be categorized as swaps.
Coinbase General Counsel Molly Abraham emphasized on November 10, 2026, that the legal framework for security futures was established by the US Congress through legislation in 2000, which from its inception accommodated joint oversight between the CFTC and the SEC.
The brief also stated that perpetual futures maintain the mechanics of traditional futures contracts, such as standardized margin and central clearing. Price parity with underlying stocks is maintained through periodic funding rate payments.
The Wall Street alliance’s efforts to immediately halt the products were dealt an initial courtroom setback. On November 3, 2026, US District Judge Valerie Caproni denied the plaintiffs’ motion for a temporary restraining order, ruling that they failed to demonstrate immediate and pressing harm.
For derivatives market participants, the proceedings mark a tangible shift: instruments born in the crypto ecosystem are now directly confronting conventional capital market structures.
Source: crypto.news.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
