Jake Chervinsky has accused CME Group of using a lawsuit against U.S. crypto perpetual futures to protect its position in a market where the exchange reportedly controls about 92% of exchange-traded derivatives volume.
Summary
- Jake Chervinsky called CME’s lawsuit against the CFTC a “shocking miscalculation” and an “unforced error.”
- Hyperliquid Policy Center cited Better Markets data showing CME controls about 92% of U.S. exchange-traded derivatives volume.
- CME argues crypto perpetual futures should be regulated as swaps, while regulators are reviewing derivatives definitions under Dodd-Frank.
According to Jake Chervinsky, chief executive of the Hyperliquid Policy Center, CME’s legal challenge against the U.S. Commodity Futures Trading Commission has exposed what he views as resistance to growing competition in the derivatives market.
In a June 19 post on X, Chervinsky called CME’s lawsuit against the CFTC a “shocking miscalculation” and “an unforced error.” He wrote that the exchange had revealed itself as “a petty incumbent monopolist afraid of competition” after being viewed for years as a dominant force in U.S. derivatives markets.
His comments came after CME Group sued the CFTC and Chairman Michael Selig over the regulator’s approval of crypto perpetual futures products in the United States. As crypto.news previously reported, CME argues the agency incorrectly classified perpetual contracts as futures instead of swaps under the framework established by the Dodd-Frank Act.
The case follows the launch of regulated perpetual futures products that, according to earlier crypto.news reporting has already generated more than $1 billion in trading volume.
Hyperliquid argues CME is resisting new competition
In its June 18 X post, the Hyperliquid Policy Center cited Better Markets data estimating that CME accounts for roughly 92% of U.S. exchange-traded derivatives volume.
“CME runs about 92% of U.S. exchange-traded derivatives. When one venue holds that much volume, everyone else carries the cost. Less choice, higher prices.”
Pointing to the history of perpetual futures trading, the group said U.S. traders were forced for years to access similar products through offshore venues while regulated versions remained unavailable domestically. The statement added that regulators only recently created a compliant pathway for those products to enter the U.S. market.
Chervinsky argued that CME’s decision to sue the regulator showed the exchange was attempting to defend its incumbent position as competition entered the market. According to the Hyperliquid Policy Center, perpetual futures represent the first genuinely new derivatives product to reach regulated U.S. markets in more than a decade.
Citing remarks from CFTC Chairman Michael Selig, the Hyperliquid Policy Center also argued that established firms often resist new competition. The organization quoted Selig as saying that “vested interests always fear the future” while maintaining that market participants should not fear incumbent firms.
CME says perpetual contracts belong under swap rules
CME has presented a different view in court filings and public statements.
As reported by crypto.news earlier, the exchange contends that perpetual futures should be regulated as swaps rather than conventional futures contracts.
Earlier this week, outgoing CME Chief Executive Terrence Duffy told CNBC that the company planned legal action after the CFTC cleared platforms including Coinbase and Kalshi to offer regulated crypto perpetual futures.
Duffy argued that perpetual contracts fit within the swap category created by Dodd-Frank. In its complaint, CME further claimed the CFTC departed from its historical treatment of similar instruments and approved a new type of product without following the rulemaking process established by Congress.
At the same time, the dispute is unfolding as U.S. regulators revisit the definitions at the center of the lawsuit. The CFTC and the Securities and Exchange Commission have now opened a joint public consultation seeking feedback on how swaps, security-based swaps, mixed swaps, and other derivatives products should be classified under Title VII of Dodd-Frank.
CFTC Chairman Michael Selig said the review could help resolve “longstanding ambiguities” in the law, while SEC Chairman Paul Atkins stated that additional clarification is overdue.
The consultation remains open for public comment for 60 days after publication in the Federal Register, with regulators seeking input on how modern derivatives products should be treated under existing rules.
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