CFTC and SEC seek public comment on swaps definition amid CME lawsuit
The Commodity Futures Trading Commission and Securities and Exchange Commission issued a joint request for public comment on June 18 to clarify the definition of swaps and distinguish them from securities. The request covers event contracts, binary options, perpetual contracts, and structured notes. SEC Chair Paul Atkins and CFTC leadership launched the initiative. The agencies are specifically seeking input on whether event contracts settling by reference to a security or index should be treated as a put, call, or straddle.
Kalshi now faces parallel threats to its product pipeline. The CME lawsuit challenges its bitcoin perpetual futures structure. This SEC-CFTC comment request threatens to reclassify event contracts as securities or security-based swaps, stripping them from the lighter CFTC regime Kalshi built its business around.
Kalshi must file comments in the 45-day window or watch other platforms shape the rules. If the agencies adopt a broad securities test for event contracts referencing indexes or securities, Kalshi would need SEC registration or product redesign for entire verticals. The combined pressure tightens Kalshi's timeline to secure its $40 billion valuation before either front produces an adverse ruling.