SEC supports CFTC suit on Kalshi perpetuals while telling court not to block trading
The SEC filed a brief backing the CFTC in a federal lawsuit challenging single-stock perpetual futures approved for Kalshi, Coinbase, and Bitnomial. The securities regulator told the court it should not block the products from trading, but declined to state whether the contracts are actually legal. The contracts began trading in the US last week after the CFTC allowed a 45-day review period to expire without action. Two powerful trading clearinghouses have also filed suits arguing the new products will harm markets.
The SEC's split position — supporting the CFTC's lawsuit while refusing to endorse the products' legality — leaves Kalshi, Coinbase, and Bitnomial in regulatory limbo. Wall Street clearinghouses are already suing to unwind the products, and the SEC's ambiguity gives those challengers ammunition while denying platforms a clean federal seal of approval.
Kalshi cannot tell traders or state prosecutors that the securities regulator has blessed its perpetuals; the unresolved status feeds the same preemption vulnerability that Ohio and Tennessee state courts have already exploited. The December 4 Utah felony arraignment of Kalshi's co-founders runs on a faster timeline than this federal litigation, so any delay in a clear ruling compounds the personal prison risk. Platforms now face parallel federal and state fights without a unified regulator stance to shield them.
Kalshi and four other firms seeking to file amicus briefs backing the CFTC as the latest federal maneuver in a running battle where state criminal charges in Utah and civil suits in Ohio and Tennessee are outpacing Washington rulemaking.