Foreign media: CME Group has sued the United States Commodity Futures Trading Commission (CFTC) for the court to revoke the approval and self-certification of the first United States Bitshi futures product. The proceedings are ostensibly procedural in nature and point to how a contract of durability should be defined by law in the United States.
Controversy focused on product characterization
CME ' s core statement is that the legal attributes of these products were not adequately assessed by the CFTC when it approved the Kalshi Up-line Contract. The application stated that the contract of renewal had no expiry date and was not necessarily to be treated as a “future” and was more likely to fall within the definition of “future” in the Dodd-Frank Act.
Once the characterization varies, the applicable regulatory requirements, rules for participants and the issuer ' s obligations change. CME also stated that there was little discussion of the definition of “renewal” in the CTC approval documents and that there were procedural gaps.
CME is worried about impacting current futures operations
The article mentions that CME believes that the renewal of the contract would directly divert the demand for long-term futures products. This traditional derivative exchange is not only a compliance issue, but also a question of whether existing product lines will be affected.
This time, CME directly sued key regulators, which is not common in United States financial markets. In particular, sustainable contracts have long been active mainly in the encryption market, and competition between traditional exchanges and new platforms is accelerating as United States domestic compliance advances.
The United States of America is opening up for a lasting contract.
The article also mentions that on the same day that CFTC approved Kalshi's application, Coinbase also received a letter “No enforcement action”. This is seen as a signal from the United States market to open the way for more durable contract products, although the specific routes are not identical.
The former General Counsel of Starkware, Katherine Kirkpatrick Bos, stated that the current law did not provide the same clear definition of “futures” and that the Dodd-Frank Act contained a more specific expression of “future”. In her view, CFTC had a margin of discretion over new products and the key question was whether “no maturity” was sufficient to determine whether it was not futures.
The article notes that there is no clear precedent for this issue at this time. If the court accepts and further reviews, the outcome may affect the manner in which the subsequent renewal of contracts in the United States market is approved, as well as the pace at which exchanges, forecast market platforms and encryption companies enter the business.