The Hyperliquid Policy Center (HPC) has thrown its weight behind the Commodity Futures Trading Commission (CFTC), urging a federal court to dismiss a lawsuit from derivatives giant CME Group over the nascent U.S. market for perpetual futures. In an amicus brief filed Wednesday, the crypto policy group accused the incumbent exchange of attempting to stifle innovation to protect its market dominance.
The legal intervention, filed in the U.S. District Court for the District of Columbia, positions the dispute as a critical test for the future of financial innovation in the United States. Representing HPC is Elizabeth Prelogar, who served as U.S.
Policy Center: innovation and market access
Solicitor General from 2021 to 2025, a move that signals the seriousness with which the crypto sector is treating the challenge from one of Wall Street’s most powerful players.
At the heart of the conflict is the CFTC’s decision in May 2024 to approve the first perpetual futures contracts for trading in the U.S., granting permission to Kalshi and Coinbase.
These instruments, which are hugely popular in international crypto markets, are derivatives that allow traders to speculate on an asset’s price without an expiration date.
CME Group, the world’s largest derivatives marketplace, swiftly sued the regulator in June, arguing the approval was a sudden reversal of policy and that these new products would directly compete with its own offerings, causing it financial injury.
HPC’s amicus brief directly confronts this argument, framing CME’s lawsuit as an anti-competitive maneuver by a legacy institution.
“Once a titan of innovation, CME now advances a novel theory of standing under which an incumbent exchange is injured whenever its regulator permits a new product that it chooses not to offer,” stated Prelogar in the filing. This argument is central to understanding the mandate for oversight in rapidly evolving markets.
The policy center contends that if CME’s legal theory is allowed to stand, it would create a chilling effect on financial innovation. Any time the CFTC approved a new product, established players could sue, claiming potential injury simply because they chose not to offer the same product.
“If CME prevails,” the brief warns, “every product that the CFTC approves will invite litigation from incumbents who prefer the status quo, and the pace of progress in the U.S. futures markets will slow to a crawl.”
What are perpetual futures?
Perpetual futures, often called “perps,” have become a cornerstone of the global cryptocurrency derivatives market. Unlike traditional futures contracts that have a set expiration date, perpetuals can be held indefinitely.
This structure makes them more akin to trading spot assets with leverage, offering a simpler and more capital-efficient way for traders to take long or short positions. Their popularity has soared on decentralized exchanges like Hyperliquid, which has seen its open interest climb dramatically.
The CFTC’s approval for Kalshi and Coinbase to list these products marked a pivotal moment, potentially opening the door for a regulated, onshore market for these popular instruments.
This move has even attracted attention at the highest political levels, with President Donald Trump recently stating he wants to see platforms like Hyperliquid brought into the U.S. market in a “fully compliant and legal fashion.”
This backdrop adds a significant political dimension to the current legal fight, pitting legacy financial giants against emerging crypto-native platforms.
The introduction of such products could have a significant impact on market dynamics. An increase in regulated derivative options often leads to a rise in trading volumes and overall market participation, which could influence Ethereum price and open interest as more sophisticated trading tools become available to U.S. investors.
CME’s steadfast opposition
CME Group’s opposition to perpetual futures has been vocal and consistent. In its initial complaint, the exchange claimed the CFTC had “suddenly changed course” on its interpretation of the law. CME has argued that these products create unacceptable risks for the financial system. CEO Terrence Duffy has publicly called perpetual futures a “disaster waiting to happen” and has been a sharp critic of their structure.
Duffy’s primary argument is that these products should be classified as swaps under the Dodd-Frank Act, the sweeping financial reform law passed in the wake of the 2008 financial crisis. Such a classification would subject them to a different and potentially more stringent regulatory regime than the one governing futures contracts.
CME contends that by approving them as futures, the CFTC is creating a regulatory loophole that could lead to systemic risk.
The incumbent exchange’s lawsuit is not just about abstract principles of market safety; it’s about direct competition. CME’s core business is built on its suite of dated futures contracts. The introduction of a popular, more flexible alternative product by competitors like Coinbase is a direct threat to its market share and revenue.
This commercial motivation is what HPC’s amicus brief seeks to expose as the primary driver behind the legal challenge.
The crucial question of legal standing
The Hyperliquid Policy Center’s legal strategy hinges on questioning CME’s fundamental right to sue, a legal concept known as “standing.” To have standing, a plaintiff must demonstrate that they have suffered a concrete injury that was caused by the defendant’s actions and that can be redressed by the court. HPC argues that CME fails this test.
The brief asserts that the CFTC’s order did not inflict a direct injury on CME. Instead, HPC argues, the decision “enlarged the market rather than dividing it.” The approval opened exchanges to new participants who were interested in perpetuals but would not have traded CME’s traditional dated futures contracts.
Therefore, the argument goes, CME did not lose customers to a new competitor; rather, the overall market for regulated derivatives grew.
Furthermore, the brief points out that the CFTC’s decision “added no new competitors to the marketplace.” Kalshi has been a CFTC-regulated exchange since 2020, and Coinbase is a major, established player in the digital asset space. The order simply allowed these existing regulated entities to offer a new type of product.
This distinction is crucial, as it undermines CME’s narrative of being harmed by the sudden appearance of new, unregulated rivals. The situation highlights the broader tensions in markets where Fed hike fears and regulatory uncertainty can already cause significant volatility.
What happens next in the perpetual futures fight
The filing of the amicus brief by HPC adds a powerful new voice to a legal battle with significant implications for the U.S. crypto industry. The court must now weigh the arguments from CME Group, the defense from the CFTC, and the pro-innovation perspective offered by the Hyperliquid Policy Center.
A decision to dismiss the case, as HPC requests, would be a major victory for the crypto industry and would likely accelerate the introduction of more perpetual futures products in the U.S.
Conversely, if the court allows CME’s case to proceed, it could usher in a prolonged period of legal uncertainty. The case could drag on for months or even years, effectively freezing the development of a regulated U.S. market for perpetual futures.
This “litigation veto,” as HPC’s brief describes it, would allow incumbent players to use the court system to delay or block new products they dislike, regardless of the regulator’s expert judgment.
Ultimately, this case is about more than just a single financial product. It represents a key battleground in the broader war over the future of finance: one that pits the established order against the disruptive potential of digital assets. The outcome will send a strong signal about whether the U.S.
regulatory and legal framework is prepared to embrace innovation or will allow incumbents to maintain the status quo.