Key Takeaways
- • U.S. District Judge Valerie Caproni of the Southern District of New York denied a temporary restraining order on Nov. 3, 2026, allowing stock perpetual futures to keep trading on Kalshi, Coinbase Derivatives and Bitnomial for now.
- • Caproni found the Capital Markets Alliance Association is "likely to succeed on the merits" in arguing the CFTC lacks statutory authority over perpetual contracts on individual stocks, reasoning that such contracts appear to be swaps under SEC jurisdiction.
- • The request failed on irreparable harm: the judge called declarations from Cboe, Citadel Securities and Healthy Markets "conjectural" and not showing harm that was "actual and imminent."
- • The order leaves the CFTC approvals in place and does not decide the case or the alliance's motion for a preliminary injunction; the CFTC's opposition is due Nov. 6 and the alliance's reply is due Nov. 10.
- • The dispute is a CFTC-SEC jurisdictional fight with implications for crypto venues, since perpetual contracts are central to crypto derivatives and a separate CME Group challenge to the CFTC's bitcoin perpetual approval is pending in Washington.
Summary
A federal judge on Nov. 3, 2026 denied an emergency bid to halt stock perpetual futures, allowing Kalshi, Coinbase Derivatives and Bitnomial to continue offering the products for now. U.S. District Judge Valerie Caproni denied the temporary restraining order after a teleconference with the parties, hours after the Commodity Futures Trading Commission (CFTC) said the products could begin trading on U.S.-regulated exchanges, according to Bitcoin Magazine.
The plaintiff, the Capital Markets Alliance Association, is a New York nonprofit whose members include Cboe Global Markets, Citadel Securities and the Healthy Markets Association, per a declaration from its secretary, Adam Ford. The group sued the CFTC and Chairman Michael S. Selig in the Southern District of New York (case No. 1:26-cv-09608), seeking to undo approvals of filings by all three exchanges. Those filings were submitted Sept. 18, and the agency let its 45-day review period lapse without a written order; Selig's Nov. 3 statement said the contracts were deemed approved under Commission Regulation 40.3 as security futures products, a category the CFTC and SEC oversee jointly.
While denying the restraining order, Caproni wrote that the alliance "is likely to succeed on the merits" of its claim that the agency lacks authority to allow perpetual derivatives on individual stocks to be offered to retail investors. She reasoned that because the contracts "do not provide for a 'sale for future delivery of a single security,'" they cannot be security futures, and instead "appear to satisfy the definition of a swap," which falls to the SEC. She also found the balance of equities and public interest favored the alliance, saying the agency's actions "seem to represent a major disruption to the equities market." The request failed on irreparable harm, as the declarations were "conjectural" and did not show harm that was "actual and imminent." Bloomberg Law reported the judge signaled she might ultimately side with the Wall Street firms opposed to the products.
The order leaves the approvals intact and does not resolve the case or the alliance's separate preliminary injunction motion. The CFTC's opposition is due Friday, Nov. 6, and the alliance's reply is due Tuesday, Nov. 10, subject to change by the assigned judge; the docket lists Judge Lorna G. Schofield as assigned. Kalshi was already listing single-stock perps on Qualcomm, McDonald's, Amgen and Costco with maximum leverage of 4.9 times.
The CFTC spokesperson called the lawsuit "troubling," telling Reuters: "Our markets should be governed by law, not litigation campaigns intended to block innovation." The alliance's complaint argues the CFTC "invited a parallel, synthetic market in U.S. stocks to grow outside the exclusive jurisdiction" of the SEC, noting Congress limited retail trading in security-based swaps to national securities exchanges under full SEC oversight.
The stakes extend to crypto-native venues, as perpetuals are the core product of crypto derivatives trading. The CFTC approved the first U.S.-listed bitcoin perpetual on May 29, and Kalshi launched it soon after. CME Group sued the CFTC in June, arguing that a contract built on exchanged funding payments is a swap rather than a future; that case is pending in Washington. The New York order covers security futures, not commodities like bitcoin, but the ruling preliminarily suggests a contract with no expiration does not resemble a future.
The plaintiff, the Capital Markets Alliance Association, is a New York nonprofit whose members include Cboe Global Markets, Citadel Securities and the Healthy Markets Association, per a declaration from its secretary, Adam Ford. The group sued the CFTC and Chairman Michael S. Selig in the Southern District of New York (case No. 1:26-cv-09608), seeking to undo approvals of filings by all three exchanges. Those filings were submitted Sept. 18, and the agency let its 45-day review period lapse without a written order; Selig's Nov. 3 statement said the contracts were deemed approved under Commission Regulation 40.3 as security futures products, a category the CFTC and SEC oversee jointly.
While denying the restraining order, Caproni wrote that the alliance "is likely to succeed on the merits" of its claim that the agency lacks authority to allow perpetual derivatives on individual stocks to be offered to retail investors. She reasoned that because the contracts "do not provide for a 'sale for future delivery of a single security,'" they cannot be security futures, and instead "appear to satisfy the definition of a swap," which falls to the SEC. She also found the balance of equities and public interest favored the alliance, saying the agency's actions "seem to represent a major disruption to the equities market." The request failed on irreparable harm, as the declarations were "conjectural" and did not show harm that was "actual and imminent." Bloomberg Law reported the judge signaled she might ultimately side with the Wall Street firms opposed to the products.
The order leaves the approvals intact and does not resolve the case or the alliance's separate preliminary injunction motion. The CFTC's opposition is due Friday, Nov. 6, and the alliance's reply is due Tuesday, Nov. 10, subject to change by the assigned judge; the docket lists Judge Lorna G. Schofield as assigned. Kalshi was already listing single-stock perps on Qualcomm, McDonald's, Amgen and Costco with maximum leverage of 4.9 times.
The CFTC spokesperson called the lawsuit "troubling," telling Reuters: "Our markets should be governed by law, not litigation campaigns intended to block innovation." The alliance's complaint argues the CFTC "invited a parallel, synthetic market in U.S. stocks to grow outside the exclusive jurisdiction" of the SEC, noting Congress limited retail trading in security-based swaps to national securities exchanges under full SEC oversight.
The stakes extend to crypto-native venues, as perpetuals are the core product of crypto derivatives trading. The CFTC approved the first U.S.-listed bitcoin perpetual on May 29, and Kalshi launched it soon after. CME Group sued the CFTC in June, arguing that a contract built on exchanged funding payments is a swap rather than a future; that case is pending in Washington. The New York order covers security futures, not commodities like bitcoin, but the ruling preliminarily suggests a contract with no expiration does not resemble a future.
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