The SEC filed a brief before the federal court in Manhattan to defend the CFTC, which is being challenged by the Capital Markets Alliance, the lobby group for Cboe and Citadel Securities, seeking to invalidate the approval of equity perpetuals. The SEC says the CFTC submitted its rule changes for review and that both agencies jointly launched a public consultation on how to classify the products, rejecting claims that the CFTC had acted without oversight. Coinbase, Kalshi, Payward, the parent company of Kraken, DRW, Jump Trading and Paradigm also support the CFTC, arguing that the SEC was involved from the outset and that the products could move offshore if the lobby prevailed. Kalshi launched its contracts on November 5 on more than 50 U.S. stocks and ETFs, with leverage capped at 4.9 times, while Coinbase Derivatives and Bitnomial are still awaiting approval to operate. The court must rule on the lobby’s request for a preliminary injunction, with no hearing date yet, as the CFTC separately fights the CME in a dispute over Kalshi’s Bitcoin perpetuals.
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