NEW YORK — Stock perpetual futures can keep trading on Kalshi, Coinbase Derivatives and Bitnomial for now, after a federal judge in Manhattan refused an emergency bid to halt them on Tuesday, November 3 — while finding that the Wall Street-backed group suing over them is likely to prove the Commodity Futures Trading Commission (CFTC) had no authority to let the products reach retail investors. U.S. District Judge Valerie Caproni denied a temporary restraining order in Capital Markets Alliance Association v. Commodity Futures Trading Commission, case No. 1:26-cv-09608 in the Southern District of New York, hours after the CFTC said the contracts could begin trading on U.S.-regulated exchanges.
The ruling splits the difference in a way that matters to anyone trading the new contracts: the products stay live, but the legal ground under them is, in the judge's preliminary view, probably not the CFTC's to stand on. Caproni wrote that the alliance "is likely to succeed on the merits" of its claim that the agency lacks statutory authority — because a perpetual contract, by definition, never provides for a "sale for future delivery of a single security," and so cannot be a security future under CFTC oversight. The contracts instead "appear to satisfy the definition of a swap," she wrote — a product regulated by the Securities and Exchange Commission (SEC).
What a stock perpetual is, and why it launched this week
A perpetual future — a 'perp' — is a leveraged derivative that tracks the price of an asset but never expires. Ordinary futures end on a set date and converge to the asset's price; perps stay aligned through periodic 'funding' payments between buyers and sellers. Perps are the core product of offshore crypto derivatives trading, and U.S. venues have been working to bring them onshore under the CFTC's framework. KalshiEX, Coinbase Derivatives and Bitnomial filed their single-stock perpetual filings on September 18. Under CFTC Regulation 40.3, a filed product is 'deemed approved' if the commission takes no action within 45 days; that period ended November 2. On November 3, CFTC Chairman Michael S. Selig — a named defendant in the suit — confirmed the equity perps were deemed approved as security futures products under the Commodity Futures Modernization Act of 2000, and the commission said U.S. traders would no longer be 'forced to turn to offshore, and often unregulated, venues.'
By the morning of Wednesday, November 4, Kalshi's stock perps page listed four contracts — on Qualcomm, McDonald's, Amgen and Costco — each with maximum leverage of 4.9 times. The plaintiff alliance is a New York nonprofit whose members include Cboe Global Markets, Citadel Securities and the Healthy Markets Association, according to a declaration from its secretary, Adam Ford. It sued the CFTC and Selig seeking to undo the approvals of all three exchanges' filings.
Why the emergency halt failed anyway
A temporary restraining order requires more than a strong legal claim: the alliance also had to show its members faced irreparable harm that was 'actual and imminent.' Caproni found the declarations from Cboe, Citadel Securities and Healthy Markets 'conjectural' about the harm members would suffer — they described possible harmful events without showing likely, immediate damage. Reporting on the order adds that she found the balance of equities and the public interest favored the alliance; the emergency request failed on the harm prong alone. The order does not decide the case, and it does not decide the alliance's separate motion for a preliminary injunction, which would be a longer-lasting block.
Security futures are overseen jointly by the CFTC and the SEC. Caproni's preliminary reading is that a contract with no expiration and no delivery is not a future at all — it looks like a swap, which belongs to the SEC. The CFTC's own policy statement on listing perpetual contracts, published June 3, said perps on equity securities 'would benefit from review by the Commission and the U.S. Securities and Exchange Commission.'
Background: bitcoin perps opened this fight
The stock fight follows the crypto one. The CFTC approved the first U.S.-listed bitcoin perpetual on May 29, and Kalshi went live with the product soon after. CME Group then sued the agency in June, arguing that a bitcoin contract built on exchanged funding payments is a swap, not a future — the same legal theory the alliance is now pressing for stocks, and the same theory Caproni preliminarily adopted on November 3. Tuesday's order covers security futures, not commodities such as bitcoin, but it is the first time a federal judge has said, even preliminarily, that a contract with no expiration does not look like a future under the statute.
What happens next
The preliminary-injunction fight now moves on a short clock: the CFTC's opposition is due Friday, November 6, and the alliance's reply is due Tuesday, November 10. Those dates are subject to change by the assigned judge — the docket lists Judge Lorna G. Schofield as assigned to the case; Caproni handled the emergency application. If a preliminary injunction issues, the three exchanges could have to pull the stock perps while the case proceeds; if it does not, trading continues while the merits are argued. Coinbase, Bitnomial and OG.com did not immediately respond to requests for comment on their launch plans, Gaming America reported. For retail traders, the immediate position is simple: the contracts are trading, at leverage up to 4.9x on Kalshi's first four names — under an approval a federal judge has said the regulator probably had no power to give.