US Court Rejects Request to Halt Individual Stock Perpetual Contracts

A federal judge in the Southern District of New York, Valerie Caproni, has denied a request for a temporary restraining order from the industry group Capital Markets Alliance, which sought to pause the Commodity Futures Trading Commission's approval for Kalshi, Bitnomial, and Coinbase Derivatives to launch perpetual contracts for individual US stocks. The court found that the plaintiffs failed to demonstrate that their members would suffer imminent and irreparable harm, but noted that the plaintiffs' claims regarding the CFTC's overreach could potentially succeed, as the relevant contracts appear not to meet the definition of "security futures" and are more akin to swaps regulated by the SEC. The CFTC must respond to the plaintiffs' preliminary injunction motion by November 6, and the plaintiffs must reply by November 10.

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