A federal judge has denied an emergency request to halt the trading of stock perpetual futures on platforms including Kalshi, Coinbase Derivatives, and Bitnomial. U.S. District Judge Valerie Caproni issued the denial of the temporary restraining order on November 3, allowing the products to remain active while the legal dispute proceeds.

Judicial Findings on Regulatory Authority

While refusing to stop the trading immediately, Judge Caproni found that the plaintiff group is likely to prove that the Commodity Futures Trading Commission exceeded its statutory authority regarding these specific financial instruments. The judge stated that because perpetual contracts do not provide for a "sale for future delivery of a single security," they cannot be classified as security futures under the CFTC’s regulatory purview.

Instead, Judge Caproni indicated that the contracts appear to satisfy the definition of a swap, a classification that falls under the jurisdiction of the Securities and Exchange Commission. This distinction forms the core of the legal challenge brought by the Capital Markets Alliance Association, which includes members such as Cboe Global Markets, Citadel Securities, and the Healthy Markets Association.

The lawsuit was filed in the Southern District of New York under case number 1:26-cv-09608. In her ruling, Judge Caproni noted that declarations submitted by Cboe, Citadel Securities, and Healthy Markets regarding the harm their members would suffer were "conjectural" and did not demonstrate the irreparable harm necessary to justify an emergency halt.

Market Activity and Regulatory Response

Following the developments, Kalshi was listing four single-stock perpetual futures on Qualcomm, McDonald’s, Amgen, and Costco by Wednesday morning, with maximum leverage of 4.9 times. The CFTC had previously approved the first U.S.-listed bitcoin perpetual on May 29.

CFTC Chairman Michael S. Selig stated on November 3 that the stock perpetual contracts were deemed approved as security futures products under Commission Regulation 40.3. A CFTC spokesperson described the lawsuit as "troubling," telling Reuters that markets should be governed by law rather than litigation campaigns intended to block innovation.