CME Group chief Terry Duffy announced in a CNBC interview that the major exchange operator plans to take the Commodity Futures Trading Commission to court over the agency’s decision to approve perpetual futures contracts.
Duffy, who recently revealed he will be leaving his CEO role next year, has been an outspoken critic of so-called “perps” — a type of listed derivative that has no expiration date. Unlike traditional futures contracts, perpetual futures allow traders to hold their positions indefinitely without ever needing to roll them over.
“I’m always up for a good battle. I’ve never shied away from one,” Duffy told CNBC, confirming the lawsuit would be filed Thursday. CME Group followed up with an emailed statement to Reuters confirming the legal action. The CFTC did not respond to a request for comment.
The controversy stems from a recent CFTC decision that gave cryptocurrency exchange Coinbase and prediction market platform Kalshi the green light last month to launch perpetual crypto futures. The move marks the first time U.S. investors will have access to such instruments through regulated domestic exchanges.
Beyond having no end date, perpetual futures can carry extremely high leverage — sometimes as much as 50-to-1 — which means investors can dramatically magnify their exposure to market swings.
Earlier this month, Duffy warned at an industry conference that this level of leverage, combined with the automatic liquidation systems commonly used in the sector, creates serious risks for everyday retail investors who may not fully understand how funding rate costs can eat into their positions over time.
He also took aim at how the CFTC handled the approval, arguing the agency skipped the standard “full review” process typically required for what it itself described as a “novel and complex” financial product.
The news rattled financial markets. Shares of CME Group, Cboe Global Markets, and Intercontinental Exchange — the parent company of the New York Stock Exchange — all declined following the CFTC’s approval, as investors grew concerned the decision could create a long-term competitive threat to established exchanges.
Separately, CME Group announced earlier Thursday that Duffy, who took on the CEO role roughly a decade ago, will be succeeded by insider Lynne Fitzpatrick, who will become the company’s first female chief executive.
