Swaps

CME Group Chairman and CEO Terry Duffy says U.S. approval of perpetual futures could leave traders exposed to unresolved tax questions if the products are ultimately deemed swaps rather than futures. Legal specialists say the dispute is complex, with courts, regulators and the IRS potentially taking separate paths on classification and reporting.

A federal judge has granted a preliminary injunction blocking Minnesota’s prediction market ban from taking effect against Kalshi, Polymarket and the Commodity Futures Trading Commission. The court found the challengers are likely to succeed in arguing that federal commodities law preempts the state statute.

Regulated perpetual futures are moving into American markets after becoming a dominant product in global crypto trading. Trading firms and exchanges are pushing ahead, while large banks remain cautious over liquidity, regulation, clearing and infrastructure.

CME Chief Executive Terrence Duffy said the exchange operator plans to challenge the CFTC’s approval of perpetual futures products. He argued the products may fall under swap rules rather than futures under Dodd-Frank.