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R. Civ. P. 12(b)(1) MOTION to Dismiss for failure to state a claim filed by CHICAGO MERCANTILE EXCHANGE INC.. (Attachments: (1) Declaration of Brian J. Beaton, Jr., (2) Exhibit 1, (3) Exhibit 2, (4) Exhibit 3, (5) Exhibit 4, (6) Exhibit 5, (7) Exhibit Excerpted Administrative Record, (8) Text of Proposed Order)(Goelman, Aitan)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/479594487/","id":479594487,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/73500937/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/495256502/","id":495256502,"tags":[],"absolute_url":"/docket/73500937/44/chicago-mercantile-exchange-inc-v-selig/","date_created":"2026-09-28T07:06:42.727120-07:00","date_modified":"2026-10-05T03:47:47.682812-07:00","sha1":"da8ce0ccf37dd171c924087414b119566bf91877","page_count":4,"file_size":163832,"filepath_local":"recap/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.44.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.44.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 1:26-cv-02157-CKK Document 44 Filed 09/28/26 Page 1 of 4\n\n\n\n\n UNITED STATES DISTRICT COURT\n FOR THE DISTRICT OF COLUMBIA\n\n\n CHICAGO MERCANTILE EXCHANGE,\n INC.,\n\n Plaintiff,\n v.\n Civil Action No. 26-2157 (CKK)\n MICHAEL S. SELIG, in his official capacity\n as Chairman of the Commodity Futures\n Trading Commission, et al.,\n\n Defendants.\n\n\n MEMORANDUM OPINION & ORDER\n (September 28, 2026)\n\n As the Court previously explained, this action concerns Plaintiff\u2019s APA challenge to\n\nDefendants\u2019 approval of perpetuals for cryptocurrency as futures and a related policy statement.\n\nSee Order, Dkt. No. 29 at 1. Defendants moved to dismiss Plaintiff\u2019s action, arguing that the Court\n\nlacks subject-matter jurisdiction and that Plaintiff has failed to state a claim. See Dkt. No. 30-1.\n\nShortly thereafter, the parties proposed a briefing schedule. See Dkt. No. 32.\n\n In their proposed briefing schedule, the parties informed the Court that they \u201cdisagree[d]\n\nover whether Defendants . . . are entitled to take discovery from Plaintiff . . . about Plaintiff\u2019s\n\nstanding.\u201d Id. at 1. The parties further informed the Court that Defendants \u201cagreed to seek leave\n\nfrom the Court before serving any discovery requests.\u201d Id. Accordingly, the parties proposed a\n\nbriefing schedule to address, in chronological order, (i) Defendants\u2019 motion for leave to seek\n\ndiscovery, (ii) Defendants\u2019 motion to dismiss, and (iii) the parties\u2019 potential cross-motions for\n\nsummary judgment. Id. at 1\u20132. The Court adopted this briefing schedule. See Order, Dkt. No.\n\n33. And Defendants\u2019 motion for discovery is now ripe. See Dkt. No. 41 (\u201cDefs.\u2019 Mot.\u201d); Dkt. No.\n\n42 (\u201cPl.\u2019s Opp\u2019n\u201d); Dkt. No. 43 (\u201cDefs.\u2019 Reply\u201d).\n 1\n\f Case 1:26-cv-02157-CKK Document 44 Filed 09/28/26 Page 2 of 4\n\n\n\n\n Defendants request leave \u201cto conduct ordinary discovery\u201d under Federal Rule of Civil\n\nProcedure 26 \u201con facts relevant to jurisdiction in anticipation of summary judgment.\u201d Defs.\u2019 Mot.\n\nat 1 n. 1. This is, in Defendants\u2019 words, an \u201cunusual\u201d request. 1 Defs.\u2019 Reply at 2; see also Amica\n\nCtr. for Immigrant Rts. v. Exec. Off. for Immigr. Rev., No. 26-cv-696 (RDM), 2026 WL 662323,\n\nat *2 (D.D.C. Mar. 2, 2026) (\u201cThe Court cannot recall an occasion in which the government has\n\nsought discovery regarding organizational standing in an [APA] case like this one.\u201d). That is\n\nbecause \u201c[d]iscovery typically is not available in APA cases.\u201d Air Transp. Ass\u2019n of Am., Inc. v.\n\nNat\u2019l Mediation Bd., 663 F.3d 476, 487 (D.C. Cir. 2011). The APA\u2019s \u201climit on discovery . . .\n\nstands in stark contrast to the Court\u2019s broad discretion to order discovery under Federal Rule of\n\nCivil Procedure 26 in non-APA cases.\u201d Univ. of California Student Ass\u2019n v. McMahon, No. 25-\n\ncv-354 (RDM), 2025 WL 1906548, at *2 (D.D.C. Mar. 18, 2025) (citing 5 U.S.C. \u00a7 706)\n\n(explaining that this \u201creflects Congress\u2019s judgment that the civil discovery rules are incompatible\n\nwith the APA\u201d).\n\n Defendants seek an exception to the APA\u2019s general limit on discovery. Defendants assert\n\nthat the APA\u2019s limit on discovery \u201capplies where plaintiffs seek discovery from the government\u201d\n\nbecause \u201cjudicial review of agency rulemaking is confined to the administrative record, so further\n\ndiscovery from the government is simply not relevant.\u201d Defs.\u2019 Mot. at 4 (emphasis in original).\n\nBut \u201cthat logic does not apply,\u201d Defendants argue, \u201cwhere the government seeks discovery from\n\nthe plaintiff that goes to whether the Court has subject-matter jurisdiction to decide the case at all.\u201d\n\nId. (emphasis in original). Maybe so, but the Court does not see how that justifies granting\n\nDefendants\u2019 request for discovery at the pleading stage.\n\n\n\n1\n Plaintiff argues the same. See Pl.\u2019s Opp\u2019n at 2 (\u201c[Plaintiff] is not aware of any APA cases where a defendant was\nallowed to take discovery of a plaintiff in an attempt to disprove competitor standing. [Plaintiff] asked Defendants for\nany contrary authority, and they did not provide any.\u201d) (emphasis in original).\n\n 2\n\f Case 1:26-cv-02157-CKK Document 44 Filed 09/28/26 Page 3 of 4\n\n\n\n\n As the Court mentioned above, Defendants seek discovery \u201cin anticipation of summary\n\njudgment.\u201d Defs.\u2019 Mot. at 1 n. 1. Federal Rule of Civil Procedure 56(d) provides a framework for\n\nparties to seek discovery in response to a motion for summary judgment. See Fed. R. Civ. P. 56(d).\n\nSpecifically, Rule 56(d) provides\n\n If a nonmovant shows by affidavit or declaration that, for specified reasons, it\n cannot present facts essential to justify its opposition, the court may: (1) defer\n considering the motion or deny it; (2) allow time to obtain affidavits or declarations\n or to take discovery; or (3) issue any other appropriate order.\n\nId.\n\n Defendants are aware of their ability to request discovery under Rule 56(d). Last month,\n\nin arguing for the Court to excuse its obligation to produce the administrative record, Defendants\n\nasserted that, \u201cif [they] conclude that discovery is needed to confirm [Plaintiff\u2019s] standing, a Rule\n\n56(d) motion may be required.\u201d Dkt. No. 28 at 7. Now, however, Defendants move for leave to\n\nserve discovery under Rule 26 \u201cin order to facilitate the efficient resolution of the case and to avoid\n\ndownstream discovery disputes or Fed. R. Civ. P. 56(d) motions.\u201d Defs.\u2019 Mot. at 1 n. 1; see also\n\nid. at 8 (\u201cDiscovery at this stage also obviates the need for a motion under Fed. R. Civ. P. 56(d),\n\nthereby saving the parties resources.\u201d). The Court is not persuaded.\n\n Granting Defendants\u2019 current request for discovery would not facilitate the efficient\n\nresolution of this case. Defendants do not claim, nor could they, that discovery is needed for the\n\nCourt\u2019s resolution of Defendants\u2019 pending motion to dismiss. Rather, Defendants\u2019 request for\n\ndiscovery is premised on the possibility that Plaintiff survives Defendants\u2019 motion to dismiss and\n\nproceeds to summary judgment. Caught between the parties\u2019 opposing views on the likelihood of\n\nthat possibility, the Court falls back on the principle that \u201c[a] court will not decide issues that\n\nwould require it to speculate as to events in the future which may never materialize.\u201d Adams v.\n\n\n\n\n 3\n\f Case 1:26-cv-02157-CKK Document 44 Filed 09/28/26 Page 4 of 4\n\n\n\n\nBell, 711 F.2d 161, 202 n. 146 (D.C. Cir. 1983) (quotation omitted). It would be inefficient to\n\norder discovery when such discovery may prove unnecessary.\n\n Moreover, granting Defendants\u2019 request for discovery under Rule 26 would bypass the\n\nmore targeted standard in Rule 56(d). As Defendants explain, Rule 26 provides for broad\n\ndiscovery under a permissive standard. See Defs.\u2019 Mot. at 2. Rule 56(d), on the other hand, is\n\nmore targeted. To obtain discovery under Rule 56(d), a party must submit an \u201caffidavit or\n\ndeclaration\u201d that shows \u201cspecified reasons\u201d why the party \u201ccannot present facts essential to justify\n\nits opposition\u201d to a motion for summary judgment. Fed. R. Civ. P. 56(d). Defendants\u2019 present\n\nrequest for discovery does not meet these requirements. Therefore, granting Defendants\u2019 request\n\nwould not only risk ordering discovery that may ultimately prove unnecessary, but it would also\n\nlikely lead to discovery that is less targeted than the appropriate discovery under Rule 56(d).\n\n Overall, Defendants\u2019 requested discovery is premature and potentially overbroad, and\n\ntherefore it would not lead to the efficient resolution of this case. Accordingly, it is hereby\n\nORDERED that Defendants\u2019 [41] Motion for Discovery on Facts Related to Plaintiff\u2019s Standing\n\nis DENIED. Should this case reach summary judgment, then, if appropriate, Defendants may\n\nmove for discovery under Rule 56(d).\n\n\n\n SO ORDERED.\n\n Dated: September 28, 2026\n\n\n COLLEEN KOLLAR-KOTELLY\n United States District Judge\n\n\n\n\n 4\n\f","ocr_status":2,"date_upload":"2026-09-28T07:45:40.917533-07:00","document_number":"44","attachment_number":null,"pacer_doc_id":"045012370192","is_available":true,"is_free_on_pacer":null,"is_sealed":false,"document_type":1,"description":"Order on Motion for Discovery","acms_document_guid":""}],"date_created":"2026-09-28T07:06:42.694885-07:00","date_modified":"2026-09-28T07:17:07.794071-07:00","date_filed":"2026-09-28","time_filed":"10:03:41","entry_number":44,"recap_sequence_number":"2026-09-28.001","pacer_sequence_number":144,"description":"ORDER denying [41] Motion for Discovery. Signed by Judge Colleen Kollar-Kotelly on 9/28/2026. (lcckk3)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/479165904/","id":479165904,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/73500937/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/494808958/","id":494808958,"tags":[],"absolute_url":"/docket/73500937/43/chicago-mercantile-exchange-inc-v-selig/","date_created":"2026-09-23T14:44:45.190093-07:00","date_modified":"2026-10-01T12:48:53.598455-07:00","sha1":"f16c0c60a44c5dab7180cbbf684d508f5ef03d89","page_count":7,"file_size":170426,"filepath_local":"recap/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.43.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.43.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 1:26-cv-02157-CKK Document 43 Filed 09/23/26 Page 1 of 7\n\n\n\n\n UNITED STATES DISTRICT COURT\n FOR THE DISTRICT OF COLUMBIA\n\nCHICAGO MERCANTILE EXCHANGE\nINC.,\n\n Plaintiff,\n\n v. Case No. 1:26-cv-02157-CKK\n\nMICHAEL S. SELIG, in his official capacity as\nChairman of the Commodity Futures Trading\nCommission; COMMODITY FUTURES\nTRADING COMMISSION,\n\n Defendants.\n\n\n\n\nDEFENDANTS\u2019 REPLY IN SUPPORT OF MOTION FOR LEAVE TO CONDUCT\n LIMITED DISCOVERY ON FACTS RELATING TO CME\u2019S ALLEGED\n COMPETITIVE INJURY STANDING\n\f Case 1:26-cv-02157-CKK Document 43 Filed 09/23/26 Page 2 of 7\n\n\n\n\n CME believes it is \u201cabsurd\u201d for there to be discovery over whether it is injured and can\n\ninvoke the Court\u2019s subject-matter jurisdiction. Opp. 1. But CME admits that discovery could prove\n\nnecessary after it moves for summary judgment, Opp. 4\u20135, and it even previews its own desire to\n\nobtain discovery from nonparty Kalshi and an amicus curiae, Opp. 10. The Court should reject\n\nthis vacillation and grant leave for Defendants to conduct limited discovery related to standing.\n\n At the outset, CME is wrong that the sky will fall if the government can obtain discovery\n\nabout a plaintiff\u2019s standing in an APA case. Opp. 1. CME simply misunderstands the law on\n\ndiscovery in APA suits. There is generally no discovery in APA suits because the court\u2019s merits\n\nreview is based only on the administrative record that was before the defendant agency when it\n\nmade the challenged decision. American Bioscience, Inc. v. Thompson, 243 F.3d 579, 582 (D.C.\n\nCir. 2001). But it does not follow, as CME would have it, that discovery is categorically barred as\n\nto non-merits issues like standing. See, e.g., Texas v. Biden, No. 2:21-cv-067, 2021 WL 4552547,\n\nat *2 (N.D. Tex. July 19, 2021) (the rule that judicial review in APA suits is limited to the\n\nadministrative record \u201cdoes not apply to non-merit issues such as standing\u201d \u2026 \u201cbecause courts\n\nconsider it \u2018not in order to supplement the administrative record on the merits, but rather to\n\ndetermine [their own] jurisdiction\u2019\u201d). Indeed, \u201c[c]ourts routinely rely on extra-[administrative]\n\nrecord evidence to support standing in APA cases.\u201d Id.; see, e.g., Monsanto Co. v. Geertson Seed\n\nFarms, 561 U.S. 139, 153\u201354 (2010) (citing declarations in addressing standing in APA case);\n\nTheodore Roosevelt Conservation P\u2019ship v. Salazar, 616 F.3d 497, 507 (D.C. Cir. 2010) (same).\n\n Accordingly, courts in this District and others have permitted discovery on the plaintiff\u2019s\n\nstanding in APA cases. See, e.g., Texas v. DHS, 756 F. Supp. 3d 310, 331\u201332 (E.D. Tex. 2024)\n\n(court allowed federal agency to conduct expedited discovery on standing in APA case); Public\n\nCitizen, Inc. v. Trump, 435 F. Supp. 3d 144, 145 (D.D.C. 2019) (Moss, J.) (court allowed discovery\n\n\n\n 1\n\f Case 1:26-cv-02157-CKK Document 43 Filed 09/23/26 Page 3 of 7\n\n\n\n\non standing between government\u2019s motion to dismiss being denied and plaintiffs\u2019 second motion\n\nfor summary judgment); Texas v. DHS, No. 6:23-cv-00007, 2023 WL 2842760, at *2 (S.D. Tex.\n\nApr. 7, 2023) (allowing \u201cextra-record discovery related to standing\u201d by all parties because \u201c[i]n\n\nAPA cases, courts routinely rely on extra-record evidence on the issue of whether the plaintiff has\n\nthe requisite standing\u201d). Discovery on standing may be unusual in APA cases, but CME has\n\nbrought an unusual lawsuit. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 562 (1992) (\u201c[W]hen\n\nhowever, as in this case, a plaintiff\u2019s asserted injury arises from the government\u2019s allegedly\n\nunlawful regulation (or lack of regulation) of someone else, much more is needed.\u201d).\n\n The consequences of allowing discovery into CME\u2019s standing are hardly revolutionary.\n\nFor one, as the foregoing demonstrates, this Court would not be \u201cthe first to open the doors to Rule\n\n26 discovery in APA actions.\u201d Opp. 4. And CME\u2019s wild conjecture that \u201cgovernment agencies\n\nwould need to answer interrogatories\u201d or \u201csit[] for depositions\u201d \u201cbefore they even need to respond\n\nto the complaint\u201d is simply not true. Opp. 1. Again, taking discovery from the plaintiff about non-\n\nmerits issues does not undermine the black-letter principle that merits discovery from the\n\ngovernment in APA cases is limited to the administrative record. And if a plaintiff believed it\n\nneeded discovery from the government to substantiate its standing in an APA case, it would need\n\nto obtain leave from the Court first\u2014just as Defendants are seeking here.\n\n Next, CME claims that Defendants can only obtain discovery on standing by filing a Rule\n\n56(d) motion. This argument comes as a surprise. When negotiating a briefing schedule, the parties\n\nagreed that Defendants would seek the Court\u2019s leave to conduct discovery precisely to avoid resort\n\nto Rule 56(d) motions practice, which could further delay proceedings. See Dkt. No. 41 at 1 n.1\n\n(\u201c[W]hen negotiating a proposed schedule, Defendants agreed to move for leave to serve discovery\n\non CME in order to facilitate the efficient resolution of the case and to avoid downstream discovery\n\n\n\n 2\n\f Case 1:26-cv-02157-CKK Document 43 Filed 09/23/26 Page 4 of 7\n\n\n\n\ndisputes or Fed. R. Civ. P. 56(d) motions.\u201d); Dkt. No. 28 at 7 (warning that \u201ca Rule 56(d) motion\u201d\n\ncould \u201cfurther convolut[e] the proceedings\u201d). And the parties\u2019 schedule builds in several months\n\nbefore the deadline for summary-judgment motions so that any discovery could occur now rather\n\nthan later. Dkt. No. 33. CME\u2019s proposal\u2014to kick the discovery can until after it has moved for\n\nsummary judgment\u2014thus invites the inefficiencies that this motion and the entire briefing\n\nschedule were designed to avoid. And it is particularly ironic given CME\u2019s past protestations\n\nagainst \u201cpiecemeal motions practice\u201d that would \u201cfrustrate the efficient resolution of this entire\n\ncase.\u201d Dkt. No. 27 at 2. That said, to the extent that the Court believes that Rule 56(d) is the proper\n\nvehicle for obtaining discovery on standing, Defendants reserve all rights to file a Rule 56(d)\n\nmotion. See Opp. 4 (\u201cDefendants were right the first time. Assuming Defendants could, in theory,\n\nmake a showing that they need jurisdictional discovery, they would need to follow Rule 56(d) by\n\nmoving in opposition to CME\u2019s summary-judgment motion\u2026.\u201d).\n\n The handful of cases denying standing-related discovery to the government are not to the\n\ncontrary. In all these cases, the courts held that the government had not identified any particular\n\nneed for discovery as to the plaintiff\u2019s standing. Amica Ctr. for Immigrant Rts. v. Executive Off.\n\nfor Immigr. Rev., No. 26-cv-696 (RDM), 2026 WL 662323, at *2 (D.D.C. Mar. 2, 2026) (holding\n\nthat the government had not \u201ceven attempt[ed] to identify a possible dispute that discovery might\n\nhelp resolve\u201d); Shelby Cnty. v. Holder, 270 F.R.D. 16, 18 (D.D.C. 2010) (Bates, J.) (\u201cThe\n\ngovernment has not shown that it needs discovery to assess Shelby County\u2019s standing.\u201d); National\n\nParks Conservation Ass\u2019n v. Department of the Interior, No. 26-cv-10877, ECF 73 (D. Mass. Sept.\n\n15, 2026) (holding that government\u2019s discovery requests were overbroad). This case could not be\n\nmore opposite. As laid out in Defendants\u2019 motion to dismiss, CME\u2019s own publicly available data\n\nand statements raise substantial doubt that it has suffered any kind of injury in fact, and there is no\n\n\n\n 3\n\f Case 1:26-cv-02157-CKK Document 43 Filed 09/23/26 Page 5 of 7\n\n\n\n\nfactual basis to show that a judgment in CME\u2019s favor would remedy its alleged injury. Dkt. No.\n\n30-1 at 11\u201321. CME disagrees, but that disagreement is precisely why discovery is essential: to\n\nallow the airing of facts that confirm or deny whether there is any justiciable controversy.\n\n The parties agree on one thing: the Court can grant leave to conduct discovery without pre-\n\nevaluating the relevance and proportionality of Defendants\u2019 discovery requests. Opp. 7. CME\n\nnonetheless previews its inevitable relevance and proportionality objections, which are unavailing.\n\nOpp. 7\u20138. Defendants\u2019 requests about CME\u2019s \u201cfinancial injury\u201d are plainly relevant to competitor\n\nstanding\u2014indeed, it is CME\u2019s burden to prove precisely that. PSSI Glob. Servs., L.L.C. v. FCC,\n\n983 F.3d 1, 11 (D.C. Cir. 2020) (\u201c[A] party asserting competitor standing must \u2018make a concrete\n\nshowing that it is in fact likely to suffer financial injury as a result of the challenged action.\u2019\u201d).\n\nDefendants are willing to disavow discovery on CME\u2019s financial injury if CME is willing to\n\nconcede that it has suffered no such injury, but if it seeks to create a factual dispute on that point,\n\nthen discovery is plainly relevant and proportional. CME also claims that \u201cfacts and\n\ncircumstances\u201d that \u201cpost-dat[e] the filing of the Complaint\u201d are not relevant because \u201cstanding is\n\nassessed at the time of the complaint\u2014not months after the fact.\u201d Opp. 8\u20139. But if the facts show\n\nthat CME was not injured in the aftermath of the challenged agency conduct, it necessarily did not\n\nface an \u201cactual or imminent\u201d competitive harm when it filed suit. Air Excursions LLC v. Yellen,\n\n66 F.4th 272, 279 (D.C. Cir. 2023).\n\n Any discovery would also be limited and proportional. Defendants would seek information\n\nrelated to CME\u2019s injury through August 2026, just a couple of months after the complaint was\n\nfiled. Nor would Defendants make \u201cunlimited\u201d requests. Opp. 9. Defendants anticipate serving\n\nonly about 20 interrogatories, 20 requests for production, and 15 requests for admission. These\n\nnarrow requests are proportional to the needs of the case and would not unduly burden CME.\n\n\n\n 4\n\f Case 1:26-cv-02157-CKK Document 43 Filed 09/23/26 Page 6 of 7\n\n\n\n\n In a final, lone paragraph, CME claims that if Defendants can seek discovery about CME\u2019s\n\nstanding, that necessarily means that CME can seek discovery from Defendants and non-parties.\n\nOpp. 10. This tit-for-tat threat is not backed by any actual need for discovery. NBC-USA Hous.,\n\nInc. Twenty-Six v. Donovan, 741 F. Supp. 2d 55, 60 (D.D.C. 2010) (Kollar-Kotelly, J.) (\u201cWhere\n\nthere is no showing of how jurisdictional discovery would help plaintiff discover anything new, it\n\nis inappropriate to subject defendants to the burden and expense of discovery.\u201d (citation\n\nmodified)). CME has not previously asked for discovery and insists that it \u201cwill easily satisfy its\n\nevidentiary burden to show an increase in competition.\u201d Opp. 6. It also has the administrative\n\nrecord, which contains \u201ccommunications between Defendants and Kalshi\u201d regarding perpetual\n\nfutures. Opp. 10. So CME\u2019s post-hoc discovery demand lacks any legitimate basis.\n\n CONCLUSION\n\n CME freely admits that \u201cDefendants have not yet seen the evidence that CME will put\n\nforward to demonstrate its standing.\u201d Opp. 5. Instead of providing that and other relevant\n\ninformation in the two months prior to summary-judgment motions, CME seeks to drag out the\n\nprocess and ultimately delay the resolution of this case. Defendants seek to avoid wasting time and\n\nask for leave to serve narrowly tailored discovery requests on standing so that the parties can file\n\ncomplete cross-motions for summary judgment and opposition briefs within the already-set time\n\nlimits. The Court should allow Defendants to conduct limited discovery related to CME\u2019s standing.\n\n\n\n Dated: September 23, 2026 Respectfully Submitted,\n\n /s/ M. Jordan Minot\n M. Jordan Minot (DC Bar No. 1722554)\n\n\n\n\n 5\n\fCase 1:26-cv-02157-CKK Document 43 Filed 09/23/26 Page 7 of 7\n\n\n\n\n TYLER S. BADGLEY\n General Counsel\n M. JORDAN MINOT\n Deputy General Counsel\n ANDREW WEISBERG\n Senior Assistant General Counsel\n HENRY J. DICKMAN\n Senior Assistant General Counsel\n ANNE W. STUKES\n Senior Assistant General Counsel\n CARLIN METZGER\n Senior Assistant General Counsel\n MARGARET P. AISENBREY\n Senior Assistant General Counsel\n\n U.S. Commodity Futures Trading Commission\n Three Lafayette Centre\n 1155 21st Street, NW\n Washington, DC 20581\n Tel: (202) 209-1087\n Fax: (202) 418-5567\n tbadgley@cftc.gov\n jminot@cftc.gov\n aweisberg@cftc.gov\n hdickman@cftc.gov\n astukes@cftc.gov\n cmetzger@cftc.gov\n maisenbrey@cftc.gov\n\n Attorneys for Defendants\n\n\n\n\n 6\n\f","ocr_status":2,"date_upload":"2026-09-24T04:19:39.484637-07:00","document_number":"43","attachment_number":null,"pacer_doc_id":"045012362957","is_available":true,"is_free_on_pacer":null,"is_sealed":false,"document_type":1,"description":"Reply to opposition to motion","acms_document_guid":""}],"date_created":"2026-09-23T14:44:45.144511-07:00","date_modified":"2026-09-23T15:11:10.382260-07:00","date_filed":"2026-09-23","time_filed":"17:37:17","entry_number":43,"recap_sequence_number":"2026-09-23.001","pacer_sequence_number":141,"description":"REPLY to opposition to motion re [41] Motion for Discovery on Facts Related to Plaintiff's Standing filed by COMMODITY FUTURES TRADING COMMISSION, MICHAEL S. SELIG. (Minot, Martin)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/478581503/","id":478581503,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/73500937/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/494210123/","id":494210123,"tags":[],"absolute_url":"/docket/73500937/42/chicago-mercantile-exchange-inc-v-selig/","date_created":"2026-09-18T14:10:10.966438-07:00","date_modified":"2026-09-30T10:29:00.808693-07:00","sha1":"0db44d040e24a149418954d594c68001c9b2d922","page_count":12,"file_size":85467,"filepath_local":"recap/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.42.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.42.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 1:26-cv-02157-CKK Document 42 Filed 09/18/26 Page 1 of 12\n\n\n\n\n IN THE UNITED STATES DISTRICT COURT\n FOR THE DISTRICT OF COLUMBIA\n\n\nCHICAGO MERCANTILE EXCHANGE INC.,\n\n Plaintiff,\n\n \u2013v.\u2013 Case No. 26-cv-2157\n\nMICHAEL S. SELIG, et al.,\n\n Defendants.\n\n\n\n\nPLAINTIFF\u2019S OPPOSITION TO DEFENDANTS\u2019 MOTION FOR LEAVE\n TO TAKE JURISDICTIONAL DISCOVERY\n\f Case 1:26-cv-02157-CKK Document 42 Filed 09/18/26 Page 2 of 12\n\n\n\n\n Rather than litigate this case on the merits, Defendants try to put up another roadblock.\n\nThey take the unprecedented position that Rule 26 governs discovery in an APA case and allows\n\nthe government to discover proprietary information about a regulated party in an attempt to\n\ndisprove competitor standing. The government does not cite a single case in this Circuit\u2014or\n\nanywhere\u2014that has permitted this kind of \u201cRule 26\u201d discovery in an APA case.\n\n The consequences of this argument are nothing short of absurd. If Defendants were right\u2014\n\nthat the \u201cordinary\u201d Rule 26 standards govern discovery here\u2014then the moment any APA\n\ncomplaint is filed, the parties are free to serve Rule 26 discovery, including interrogatories,\n\nrequests for production, and deposition notices. Under this unprecedented position, government\n\nagencies would need to answer interrogatories\u2014and officials could be sitting for depositions\u2014\n\nbefore they even need to respond to the complaint. It is unsurprising that there is no support for\n\nDefendants\u2019 position.\n\n Courts in this Circuit are clear: Rule 26 simply does not apply in the standard fashion in\n\nthe APA context. Instead, should Defendants require discovery at the summary-judgment stage,\n\nthey can move pursuant to Rule 56(d)\u2014the exact procedure Defendants invoked in prior briefing\n\nbefore this Court. Seeking discovery now (which is not permitted regardless) is plainly premature\n\nbefore this Court has reviewed the parties\u2019 motion-to-dismiss and summary-judgment briefing.\n\n If all of this were not reason enough to summarily deny Defendants\u2019 misguided motion,\n\ntheir requested discovery fails even under the \u201cordinary\u201d principles of Rule 26. Defendants\u2019\n\nposition rests on misreadings of competitor-standing law and Article III injury more generally.\n\nCME\u2019s forthcoming opposition to Defendants\u2019 motion to dismiss will demonstrate that each of\n\nDefendants\u2019 competitor-standing arguments is foreclosed by binding D.C. Circuit precedent that\n\nDefendants ignore. Most obviously, Defendants\u2019 contention that CME must prove \u201cfinancial\n\n\n\n\n 1\n\f Case 1:26-cv-02157-CKK Document 42 Filed 09/18/26 Page 3 of 12\n\n\n\n\ninjury\u201d has been rejected time and time again. All that CME needs to show is an increase in\n\ncompetition. But even worse, Defendants seek extensive discovery into CME\u2019s post-filing\n\ncircumstances. Yet standing is assessed at the time of the filing of the Complaint\u2014not after.\n\nThough CME must support its standing with facts at the summary-judgment stage, that does not\n\ngive Defendants a right to engage in an extra-record fishing expedition into events taking place\n\nmonths after CME filed this lawsuit.\n\n For any of the above reasons, this Court should deny Defendants\u2019 motion for leave to take\n\ndiscovery.\n\nI. In an APA Case, Standard Rule 26 Discovery Is Not Available.\n\n Defendants do not cite a single case allowing, in an APA action, the \u201cRule 26\u201d discovery\n\nthey seek. In particular, they have not cited any APA case allowing a government regulator to\n\nwield Rule 26 to obtain sensitive business information from a party it regulates\u2014all under the\n\nguise of disproving standing. The absence of support is unsurprising for at least two reasons.\n\n First, it is black-letter law that \u201cdiscovery is unavailable in APA cases, except in two\n\ncircumstances: (1) where the party seeking discovery makes a strong showing of bad faith or\n\nimproper behavior; or (2) in the rare case in which the record is so bare as to frustrate judicial\n\nreview.\u201d Urb. Sustainability Directors Network v. U.S. Dep\u2019t of Agric., No. 25-cv-1775 (BAH),\n\n2025 WL 2374528, at *40 (D.D.C. Aug. 14, 2025) (citation modified). CME is not aware of any\n\nAPA cases where a defendant was allowed to take discovery of a plaintiff in an attempt to disprove\n\ncompetitor standing. CME asked Defendants for any contrary authority, and they did not provide\n\nany.1\n\n\n\n1\n While a plaintiff may be entitled to jurisdictional discovery, Defendants do not claim they are\nseeking jurisdictional discovery here. Instead, they purport to take \u201cordinary discovery\u201d under\nRule 26 \u201con facts relevant to jurisdiction.\u201d Defs.\u2019 Mot. at 1 n.1.\n\n\n 2\n\f Case 1:26-cv-02157-CKK Document 42 Filed 09/18/26 Page 4 of 12\n\n\n\n\n Defendants proclaim that the restrictions on APA discovery apply only when a plaintiff\n\nseeks discovery from an agency in an APA case. Defs.\u2019 Mot. at 4; but see id. (contending that\n\n\u201cwhat is sauce for the goose is normally sauce for the gander\u201d). That assertion rests on nothing but\n\nDefendants\u2019 say-so. For support, Defendants cite Scenic America, Inc. v. United States Department\n\nof Transportation, 836 F.3d 42 (D.C. Cir. 2016). But that case makes the undisputed point that a\n\nplaintiff must meet its burden to show standing at \u201ceach phase\u201d of a litigation; i.e., that a plaintiff\n\nmust support its standing with facts at the summary-judgment stage. Id. at 48-49. It says nothing\n\nabout discovery (the word does not appear in the decision). And Defendants\u2019 evident position that\n\nthey are entitled to take discovery of CME when it is CME\u2019s burden to prove its standing makes\n\nlittle sense. If CME moves for summary judgment without proving its standing, Defendants can\n\nsimply point out that CME has not met its burden.\n\n Second, while Defendants\u2019 motion is heavy on cases concerning Rule 26 discovery, the\n\nstandards for Rule 26 discovery do not govern APA cases. The APA\u2019s \u201climit on discovery \u2026\n\nstands in stark contrast to the Court\u2019s broad discretion to order discovery under Federal Rule of\n\nCivil Procedure 26 in non-APA cases.\u201d Univ. of Cal. Student Ass\u2019n v. McMahon, No. 25-cv-354\n\n(RDM), 2025 WL 1906548, at *2 (D.D.C. Mar. 18, 2025); see also Off. of Foreign Assets Control\n\nv. Voices in the Wilderness, 382 F. Supp. 2d 54, 63 (D.D.C. 2005) (\u201c[T]he Court\u2019s review is\n\nappropriately limited, as is customary, to the administrative record and additional materials which\n\nthe Court has ordered the Agency to produce.\u201d). Defendants claim that because they had to produce\n\nthe administrative record, as required by the local rules, they somehow have a right to take\n\ndiscovery now. Defs.\u2019 Mot. at 4. If that were true, surely Defendants would have caselaw support.\n\nBut they have none.\n\n\n\n\n 3\n\f Case 1:26-cv-02157-CKK Document 42 Filed 09/18/26 Page 5 of 12\n\n\n\n\n Defendants ask this Court to be the first to open the doors to Rule 26 discovery in APA\n\nactions. Such a holding would wreak havoc in these types of cases. Because administrative-record\n\ncases are exempt from initial disclosures and scheduling conferences, Defendants\u2019 position would\n\nnecessarily mean that every APA plaintiff could, upon filing the complaint, serve deposition\n\nnotices, interrogatories, requests for production, and requests for admission upon the\n\ngovernment\u2014even if only to prove standing.2 The government would then have to respond to\n\nwritten discovery within 30 days\u2014a month sooner than the government\u2019s responsive pleading\n\nwould be due\u2014and potentially sit for depositions before filing a responsive pleading. There is a\n\nreason why no court has adopted the position Defendants assert here.\n\n In short, Defendants have not cited to a single APA case supporting their ability to take\n\ninvasive \u201cRule 26\u201d discovery in an effort to disprove CME\u2019s competitor standing. That is because\n\nsuch discovery is not available. For this reason alone, this Court should deny their motion.\n\nII. Defendants\u2019 Motion Is Premature and Does Not Comply with Rule 56(d).\n\n Just weeks ago, while the parties briefed Defendants\u2019 attempt to withhold the\n\nadministrative record, Defendants represented to the Court that if they needed discovery to test\n\nCME\u2019s standing on summary judgment, \u201ca Rule 56(d) motion may be required.\u201d ECF 28 at 7.\n\nNow, with no explanation, Defendants have abandoned that position and argue that they can freely\n\ntake Rule 26 discovery at any time in an APA case (which they cannot do, see supra).\n\n But Defendants were right the first time. Assuming Defendants could, in theory, make a\n\nshowing that they need jurisdictional discovery, they would need to follow Rule 56(d) by moving\n\nin opposition to CME\u2019s summary-judgment motion and \u201cshow[ing] by affidavit or declaration that,\n\n\n\n2\n See Awan v. U.S. Dep\u2019t of Just., No. 10-cv-1100 (BAH), 2011 WL 2836555, at *1 (D.D.C. July\n13, 2011) (in cases exempted from initial disclosures and Rule 26(f), \u201cthere is no prohibition on\nthe immediate availability of discovery upon the commencement of the case\u201d).\n\n\n 4\n\f Case 1:26-cv-02157-CKK Document 42 Filed 09/18/26 Page 6 of 12\n\n\n\n\nfor specified reasons, [they] cannot present facts essential to justify [their] opposition.\u201d Fed. R.\n\nCiv. P. 56(d).\n\n Unlike Defendants\u2019 novel Rule 26 argument, the Rule 56(d) position is supported by\n\nprecedent. Judge Moss followed this procedure just months ago in Amica Center for Immigrant\n\nRights v. Executive Office for Immigration Review, No. 26-cv-696 (RDM), 2026 WL 662323\n\n(D.D.C. Mar. 2, 2026). There, the government asserted it \u201cmight want to seek \u2018jurisdictional\n\ndiscovery on Plaintiffs\u2019 assertions as to their organizational standing.\u2019\u201d Id. at *1. But neither the\n\ngovernment nor the court could identify any prior instance where the government sought such\n\njurisdictional discovery. Id. at *2. Rather than let the government prematurely take jurisdictional\n\ndiscovery, Judge Moss directed the government to \u201craise that need in its opposition to the motion\n\nfor summary judgment\u201d as required by Rule 56(d). Id.\n\n Judge Bates invoked the same procedure in Shelby County v. Holder under the predecessor\n\nrule to Rule 56(d). 270 F.R.D. 16, 18 (D.D.C. 2010). To take standing-related discovery of the\n\nplaintiff, the government had to show, under Rule 56 and in opposition to the plaintiff\u2019s summary-\n\njudgment motion, why it \u201cneed[ed] discovery to assess [plaintiff]\u2019s standing.\u201d Id. Because the\n\ngovernment \u201coffered no reason to doubt the veracity\u201d of the standing declaration offered by the\n\nplaintiff, it failed to meet its burden to take such discovery. Id. Here, Defendants have not yet seen\n\nthe evidence that CME will put forward to demonstrate its standing and cannot articulate any basis\n\nfor why they need discovery now.3\n\n\n\n\n3\n The government recently tried a similar discovery gambit in the District of Massachusetts. But\nthat court held that the government\u2019s premature requests \u201craise[d] substantial concerns about abuse\nof the discovery process.\u201d Nat\u2019l Parks Conservation Ass\u2019n v. Dep\u2019t of the Interior, No. 26-cv-\n10877, ECF 73 (D. Mass. Sept. 15, 2026). The court instead held that defendants could \u201craise\nspecific evidentiary challenges in their summary judgment briefing, including by seeking relief\nunder Fed. R. Civ. P. 56(d),\u201d but \u201c[a]ny such requests under Rule 56(d) must be limited to\n\n\n 5\n\f Case 1:26-cv-02157-CKK Document 42 Filed 09/18/26 Page 7 of 12\n\n\n\n\n In particular, no discovery is necessary because CME will easily satisfy its evidentiary\n\nburden to show an increase in competition. The evidence will include Defendants\u2019 own statements\n\nconcerning the unlawful increase in competition caused by their actions. As just a flavor of such\n\nevidence, the very day CME filed this lawsuit, a CFTC spokesperson declared: \u201cRather than\n\ncompete in the marketplace, the CME has decided to undertake lawfare against the agency and the\n\nTrump administration\u2019s pro-innovation agenda\u201d and that \u201c[i]ncumbents fear the future and having\n\nto compete on a level playing field.\u201d Ryan Knappenberger, CFTC Faces Suit over Approving\n\nKalshi Bid to List \u2018Perpetual\u2019 Futures Contracts, Courthouse News Serv. (June 18, 2026),\n\nhttps://perma.cc/6BST-M6WP. The administrative record further shows that Kalshi repeatedly\n\nargued to the CFTC that \u201c[r]egulating the Perpetual Contracts as [f]utures [c]ontracts [w]ould \u2026\n\n[p]romote [c]ompetition.\u201d AR99 (emphasis added); accord AR109. And even Defendants\u2019 own\n\namicus announced, the day CME filed, that CME \u201cruns about 92% of U.S. exchange-traded\n\nderivatives\u201d but approval of perpetual futures would mean \u201c[m]ore competition among\n\nexchanges.\u201d Hyperliquid Pol\u2019y Ctr. (@HyperliquidPC), X (June 18, 2026), https://perma.cc/8CL2-\n\n7MS5. Those statements alone demonstrate the common-sense point\u2014CME, as a derivatives\n\nexchange listing futures contracts, has standing to challenge a \u201cnovel\u201d decision classifying, as\n\nfutures, perpetual cryptocurrency derivatives with no expiration date. See AR11.\n\nIII. Defendants\u2019 Proposed Discovery Is Irrelevant, Not Proportional to the Needs of the\n Case, and Would Be Unduly Burdensome.\n\n Defendants spend much of their motion arguing under an incorrect standard. They contend\n\nthat their yet-to-be-unveiled discovery requests are relevant, proportional, and not unduly\n\n\n\n\njurisdictional facts about which Defendants have a specific, evidentiary basis for questioning their\naccuracy.\u201d Id.\n\n\n 6\n\f Case 1:26-cv-02157-CKK Document 42 Filed 09/18/26 Page 8 of 12\n\n\n\n\nburdensome. Defs.\u2019 Mot. at 2. But those arguments are irrelevant, because the question is whether\n\ndiscovery is appropriate in the first place, not whether Defendants\u2019 future discovery requests are\n\nvalid. See Tarquinii v. Del Toro, No. 21-cv-1567, 2023 WL 2424618, at *2 (D.D.C. Mar. 9, 2023)\n\n(applying discovery standards \u201c[w]here a party seeks to compel a response to a discovery request\u201d)\n\n(cited in Defs.\u2019 Mot. at 2).\n\n But even if the Court were to review the motion under Defendants\u2019 standard, it would still\n\nfail. The discovery Defendants seek\u2014which they describe as \u201ctailored\u201d but actually consists of\n\ninterrogatories, requests for production, and requests for admission across eight broad categories\n\nof information including \u201cfacts, data, and analysis,\u201d Defs.\u2019 Mot. at 5-6\u2014is entirely irrelevant to\n\nCME\u2019s standing, is disproportional on its face, and would be unduly burdensome.\n\n Defendants propose to take discovery into whether CME has suffered a \u201cfinancial injury\u201d\n\nand CME\u2019s future plans related to perpetual contracts. Id. But half of that discovery is irrelevant\n\nbecause CME is not required to show financial injury to have competitor standing. The other half\n\nis irrelevant because it concerns post-filing circumstances, when standing is assessed at the time\n\nof the filing of the complaint. There is no basis for jurisdictional discovery where a court can \u201cnot\n\nsee what facts additional discovery could produce that would affect [its] jurisdictional analysis.\u201d\n\nErwin-Simpson v. AirAsia Berhad, 985 F.3d 883, 892 (D.C. Cir. 2021).\n\n The vast majority of Defendants\u2019 requests for discovery are irrelevant because they rest on\n\na blatant misreading of competitor-standing law, as CME will demonstrate in its forthcoming\n\nopposition to Defendants\u2019 motion to dismiss. Put simply, where a plaintiff shows an increase in\n\ncompetition, it does not need to show financial injury. See Wash. All. of Tech. Workers v. U.S.\n\nDep\u2019t of Homeland Sec., 892 F.3d 332, 341 (D.C. Cir. 2018) (\u201c[t]he injury claimed is exposure to\n\nincreased competition \u2026 not lost jobs, per se\u201d); Sherley v. Sebelius, 776 F. Supp. 2d 1, 12 (D.D.C.\n\n\n\n\n 7\n\f Case 1:26-cv-02157-CKK Document 42 Filed 09/18/26 Page 9 of 12\n\n\n\n\n2011) (rejecting the argument \u201cthat plaintiffs must show not only an increase in competition but\n\nalso specific injuries caused by that increased competition in order to satisfy the injury in fact\n\nrequirement\u201d), aff\u2019d, 689 F.3d 776 (D.C. Cir. 2012). The administrative record confirms that the\n\napproval of these contracts would \u201cpromote competition.\u201d See supra. Statements from Defendants\n\nalso show that the approval of perpetual contracts will increase competition against CME. Id.\n\nNothing more is needed.\n\n In fact, each argument from Defendants\u2019 motion to dismiss concerning competitor\n\nstanding\u2014for example, that CME\u2019s injury is self-inflicted or that it must show that third parties\n\nwill stop using CME\u2019s dated futures, ECF 30-1 at 13, 17\u2014is expressly foreclosed by D.C. Circuit\n\nprecedent that Defendants do not mention. See, e.g., Shays v. Fed. Election Comm\u2019n, 414 F.3d 76,\n\n89 (D.C. Cir. 2005) (rejecting argument that competitors\u2019 injury was self-inflicted because they\n\ncould have engaged in the same challenged conduct \u201cbecause being put to the choice of either\n\nviolating [the law] or suffering disadvantage \u2026 is itself a predicament the statute spares them,\n\n[and] having to make that choice constitutes Article III injury\u201d). Defendants\u2019 relevancy arguments\n\nrest on standing arguments that have been rejected time and time again in this Circuit.\n\n Defendants\u2019 remaining relevancy contentions fail because Defendants seek information\n\nconcerning facts and circumstances post-dating the filing of the Complaint. For example,\n\nDefendants repeatedly cite to statements made by CME\u2019s CEO in an earnings call in July 2026\n\nand CME data and trading volume from last month. Defs.\u2019 Mot. at 5-6. Setting to the side that\n\nDefendants misrepresent Mr. Duffy\u2019s statements,4 standing is assessed at the time of the\n\n\n\n\n4\n As CME will explain in its opposition to Defendants\u2019 motion to dismiss, Mr. Duffy\u2019s statements\nexplicitly concern institutional investors, not retail trading. The Complaint could not be clearer:\nthe competitive harm in this case relates to retail trading.\n\n\n\n 8\n\f Case 1:26-cv-02157-CKK Document 42 Filed 09/18/26 Page 10 of 12\n\n\n\n\ncomplaint\u2014not months after the fact. See, e.g., Wheaton Coll. v. Sebelius, 703 F.3d 551, 552 (D.C.\n\nCir. 2012) (\u201c[S]tanding is assessed at the time of filing.\u201d). Events in July and August 2026 do not\n\nconcern standing. And of course, even if CME saw higher trading volume on certain products,\n\nDefs.\u2019 Mot. at 6 n.3, that does not show that such activity would not have been higher absent\n\nDefendants\u2019 unlawful actions. Defendants\u2019 contentions, as CME will discuss in its opposition, rest\n\non rank speculation and counterfactuals that CME is not required to disprove to show standing.\n\n Because Defendants\u2019 requests are irrelevant, they are necessarily not proportional to the\n\nneeds of this APA case and would be unduly burdensome. See, e.g., Sanchez v. Target Corp., No.\n\n19-cv-03186 (APM), 2020 WL 13610771, at *1 (D.D.C. July 27, 2020) (irrelevancy of the\n\nrequest\u201d directly undercuts proportionality). While they claim that their requests are \u201ctailored,\u201d it\n\nis telling that they have not included the actual requests.5 Defendants do not offer any limits on the\n\nnumber of interrogatories, requests for production, or requests for admission they intend to serve.\n\nThere can be no mistake that serving up to 25 interrogatories, unlimited requests for production,\n\nand unlimited requests for admission\u2014on matters that do not require any discovery\u2014would be\n\ndisproportional to the needs of this APA case. And requiring CME to potentially produce highly\n\nsensitive business information\u2014including information concerning its future business strategy\u2014to\n\nits regulator is unduly burdensome. That is all the more so because the administrative record\n\nreveals that the CFTC and Kalshi\u2014one of CME\u2019s direct competitors\u2014have worked together hand\n\nin hand on the process for getting perpetual contracts approved as futures, and in the eight months\n\nsince Chair Selig\u2019s appointment, the CFTC has filed a host of briefs in district courts and appellate\n\ncourts in support of Kalshi\u2019s sports gambling business, including taking the unprecedented step of\n\n\n\n\n5\n CME reserves all rights, including objecting to the individual requests, in the event the Court\ngrants any discovery.\n\n\n 9\n\f Case 1:26-cv-02157-CKK Document 42 Filed 09/18/26 Page 11 of 12\n\n\n\n\nsuing nine different states for their efforts to regulate gambling in their territory. In fact\u2014apart\n\nfrom the two agency actions challenged here\u2014the only documents in the administrative record are\n\nfrom Kalshi or its related entities.\n\n Defendants\u2019 attempt to take discovery here is nothing more than a fishing expedition for\n\nirrelevant information that does not go to testing CME\u2019s standing. Even under Defendants\u2019 own\n\nmisguided view of discovery in an APA case, the Court should deny Defendants\u2019 motion.\n\nIV. If the Court Grants Defendants\u2019 Motion, Then CME Is Entitled to Jurisdictional\n Discovery.\n\n This Court should not permit Defendants\u2019 unprecedented detour into Rule 26. But if the\n\nCourt were inclined to allow such discovery, then CME would be entitled to discovery of\n\nDefendants and third parties, including, but not limited to, Kalshi and its related entities.\n\nDefendants, Kalshi, and even the CFTC\u2019s amicus have all made direct statements about how the\n\nDefendants\u2019 actions in this case increase competition. Discovery into any documents and\n\ncommunications concerning those entities\u2019 analyses, assessments, or evaluations of the impact of\n\nthe Defendants\u2019 approval of perpetual contracts on competition would be relevant (if the Court\n\nadopted Defendants\u2019 arguments in their motion). Such discovery would include communications\n\nbetween Defendants and Kalshi and others relating to how classifying perpetuals as futures would\n\naffect competition. It would include any analyses from Defendants, Kalshi, and others evaluating\n\n(1) why companies, like Kalshi, have not previously listed perpetuals as swaps; (2) the benefits,\n\nincluding the tax benefits, to companies like Kalshi and others of listing perpetuals as futures as\n\nopposed to swaps; and (3) any impact on derivative exchanges like CME of Defendants\u2019 actions.\n\nAs Defendants repeat, \u201cwhat is sauce for the goose is normally sauce for the gander.\u201d\n\n CONCLUSION\n\n For any of the above reasons, this Court should deny Defendants\u2019 motion.\n\n\n\n 10\n\f Case 1:26-cv-02157-CKK Document 42 Filed 09/18/26 Page 12 of 12\n\n\n\n\nDated: September 18, 2026 Respectfully submitted,\n\n /s/ Aitan D. Goelman\n\n Aitan D. Goelman (D.C. Bar No. 446636)\n Ivano M. Ventresca (D.C. Bar No. 1045769)\n Brian J. Beaton, Jr. (D.C. Bar No. 90020963)\n\n ZUCKERMAN SPAEDER LLP\n 2100 L Street NW, Suite 400\n Washington, DC 20037\n Tel: (202) 778-1800\n Fax: (202) 822-8136\n agoelman@zuckerman.com\n iventresca@zuckerman.com\n bbeaton@zuckerman.com\n\n Attorneys for Plaintiff Chicago Mercantile\n Exchange Inc.\n\n\n\n\n 11\n\f","ocr_status":2,"date_upload":"2026-09-21T05:11:09.951436-07:00","document_number":"42","attachment_number":null,"pacer_doc_id":"045012354313","is_available":true,"is_free_on_pacer":null,"is_sealed":false,"document_type":1,"description":"Memorandum in opposition to motion","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/494210143/","id":494210143,"tags":[],"absolute_url":"/docket/73500937/42/1/chicago-mercantile-exchange-inc-v-selig/","date_created":"2026-09-18T14:10:15.078006-07:00","date_modified":"2026-09-30T09:52:24.352401-07:00","sha1":"39e3795094cb51a4cc8e7aa533a0b372d1e7ad73","page_count":23,"file_size":1014527,"filepath_local":"recap/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.42.1.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.42.1.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:26-cv-02157-CKK Document 42-1 Filed 09/18/26 Page 1 of 23\n\n\n\n\n EXCERPTS FROM\n ADMINISTRATIVE\n RECORD\n\f Case 1:26-cv-02157-CKK Document 42-1 Filed 09/18/26 Page 2 of 23\n33160 Federal Register / Vol. 91, No. 106 / Wednesday, June 3, 2026 / Notices\n\nprogram in the same application under under the pilot program in favor of a status outside the jurisdiction of the\nappeal during the next quarter of the continuing application. A continuing PTAB. Additionally, any request by an\nprogram, but both of these filings count application will not be granted special appellant causing a delay in the conduct\ntowards appellant\u2019s petition filing limit. status based on the petition filed in the of the appeal, such as for an extension\n parent application. Each application of time under 37 CFR 1.136(b) or for\nIII. Prosecution of the Application\n (including each continuing application) additional briefing, will be cause for\nGranted Special Status Under the Pilot\n must, on its own merit, meet all removal of expedited status.\nProgram\n requirements for special status under\n John A. Squires,\nA. Replies by the Applicant Under the the pilot program, and be accompanied\n by its own petition as detailed in Part Under Secretary of Commerce for Intellectual\nPilot Program\n Property and Director of the United States\n The time periods set for reply in I above. Patent and Trademark Office.\nOffice actions for an application granted IV. Conduct of Appeals Accepted Into [FR Doc. 2026\u201311098 Filed 6\u20132\u201326; 8:45 am]\nspecial status under the pilot program the Pilot Program BILLING CODE 3510\u201316\u2013P\nwill be the same as those set forth in\nsection 710.02(b) of the MPEP. A reply A. Hearings\nto an Office action must be fully A petition to participate in the pilot COMMODITY FUTURES TRADING\nresponsive to the rejections, objections, program may be filed for ex parte COMMISSION\nand requirements made by the appeals in which the appellant seeks an\nexaminer. Any amendment filed in oral hearing before the PTAB, that is, Policy Statement Concerning the\nreply to an Office action may be treated \u2018\u2018heard\u2019\u2019 appeals, as well as those Listing of Perpetual Contracts\nas not fully responsive if it attempts to: appeals for which no oral hearing is\n(1) add claims that would result in more requested, that is, \u2018\u2018on-brief\u2019\u2019 appeals. AGENCY: Commodity Futures Trading\nthan three independent claims or more Hearings in ex parte appeals accorded Commission.\nthan 20 total claims pending in the special status under the pilot program ACTION: Policy statement.\napplication; or (2) add any multiple will be conducted according to the\n SUMMARY: This policy statement\ndependent claim(s). standard PTAB hearing procedures.\n describes the views of the Commodity\n If a reply to a non-final Office action Appellants seeking an oral hearing\n Futures Trading Commission (the\nis not fully responsive for failing to should submit, along with the request\n \u2018\u2018CFTC\u2019\u2019 or \u2018\u2018Commission\u2019\u2019) concerning\ncomply with the pilot program\u2019s claim for oral hearing, any preferences as to\n the listing of perpetual contracts.\nrequirements but is a bona fide attempt the time, date, or location of the hearing.\n Contemporaneously with the issuance\nto advance the application to final The PTAB will make best efforts to\n of this policy statement, the\naction, the examiner may, at the schedule a hearing in accordance with\n Commission has issued an order (the\nexaminer\u2019s discretion, issue a Notice of such preferences. If the PTAB is unable\n \u2018\u2018Order\u2019\u2019) permitting the listing of a\nNon-Responsive Amendment and to accommodate an appellant\u2019s\n perpetual contract that references the\nprovide a shortened statutory period of preferences, it will schedule the hearing\n spot price of bitcoin by a designated\ntwo months for the applicant to supply in an available hearing room at any\n contract market (\u2018\u2018DCM\u2019\u2019) as a futures\na fully responsive reply. Extensions of office, including a regional office. An\n contract. Given the unique\nthis time period under 37 CFR 1.136(a) appellant may waive the hearing and\n characteristics of perpetual contracts,\nto the Notice of Non-Responsive continue under the pilot program for\n which tend to vary based on the\nAmendment will be permitted, but in no consideration and decision on the\n underlying asset they reference, the\ncase can any extension carry the date for briefs. An appellant may not reschedule\n Commission is of the view that the case-\nreply to this notice beyond the the date or time of a hearing and remain\n by-case review process detailed in\nmaximum period of six months set by in the pilot program. If an appellant in\n Commission Regulation 40.3 is\nstatute (35 U.S.C. 133). However, any an ex parte appeal accorded expedited\n appropriate for the listing of perpetual\nfurther non-responsive amendment status must reschedule the date or time\n contracts that reference asset classes\ntypically will not be treated as bona of a hearing and is not willing to waive\n that are not contemplated in the Order.\nfide, and as such, the time period set in the oral hearing, then the appellant may\n opt out of the pilot program, thereby DATES: The Commission\u2019s policy\nthe prior notice will continue to run.\n regaining the ability to reschedule or statement is adopted as of May 29, 2026.\nB. After-Final and Appeal Procedures relocate the hearing as per standard FOR FURTHER INFORMATION CONTACT:\n Any amendment, affidavit, or other PTAB hearing procedures. Roger Smith, 202\u2013418\u20135344, rsmith@\nevidence after a final Office action and cftc.gov, Division of Market Oversight,\n B. Termination of Expedited Status of Commodity Futures Trading\nprior to appeal must comply with 37\n Appeal Commission, 77 West Jackson Blvd.,\nCFR 1.116. During the appeal process,\nthe application will be treated in Under the pilot program, special Suite 800, Chicago, Illinois 60604 or\naccordance with the normal appeal status will be maintained in an ex parte Stephen Andrews, Deputy General\nprocedure (see MPEP Chapter 1200) appeal from the date the petition for Counsel for Regulation, 202\u2013308\u20137563,\nunless the appeal is granted special inclusion in the pilot program is granted sdandrews@cftc.gov, Office of the\nstatus under this program or another until the PTAB\u2019s jurisdiction ends General Counsel, Commodity Futures\nprogram. under 37 CFR 41.35(b). Activities Trading Commission, Three Lafayette\n subsequent to an appellant\u2019s withdrawal Centre, 1151 21st Street NW,\nC. Application Cannot Be Withdrawn from the pilot program or the PTAB\u2019s Washington, DC 20581.\nFrom the Pilot Program decision, including any reopened SUPPLEMENTARY INFORMATION:\n There is no provision to withdraw an prosecution, will not be treated as\napplication undergoing expedited subject to expedited status, nor will I. Introduction and Background\nexamination from the pilot program. An filing a petition to expedite an appeal Perpetual contracts are derivative\napplicant may abandon an application under the pilot program cause an contracts that have no fixed expiration\nthat has been granted special status application to be accorded expedited date, and which rely on a periodic\n\n\n AR10\n\f Case 1:26-cv-02157-CKK Document 42-1 Filed 09/18/26 Page 3 of 23\n Federal Register / Vol. 91, No. 106 / Wednesday, June 3, 2026 / Notices 33161\n\nfunding rate mechanism, rather than a the benefit of registrants, market between the perpetual contract\u2019s market\nfixed expiration date, to maintain participants, and the public, its view price and the underlying asset\u2019s spot\nrelative price parity with the underlying that perpetual contracts that reference price. When a perpetual contract trades\nasset\u2019s spot price. Perpetual contracts underlying asset classes that are not above the spot price, the traders with\nhave become a dominant form of crypto contemplated in the Order 5 should be long positions make payments while the\nderivative trading in global markets. submitted for Commission review and traders with short positions receive\nHowever, given the regulatory approval pursuant to the voluntary payments; and vice versa. These\nuncertainty concerning the appropriate product approval process under payments are intended to create an\nclassification of these types of contracts Commission Regulation 40.3.6 economic incentive for market\nin the U.S. derivatives markets, the This policy statement is a general participants to arbitrage away the price\nmarket for perpetual contracts has statement of policy issued under 5 differential by opening positions on\nlargely developed outside of the United U.S.C. 553(b)(A). It does not impose any whichever side of the market is accruing\nStates, with the majority of trading obligation on any person, modify or the payments. In this way, the funding\noccurring on offshore trading venues. supersede any provision of the rate is designed to keep closely aligned\n The Commission has taken a series of Commodity Exchange Act (\u2018\u2018CEA\u2019\u2019) or a perpetual contract\u2019s price to the\nsteps over the past year to develop a the Commission\u2019s regulations underlying asset\u2019s price and functions\nworkable domestic framework for these thereunder, create any right or benefit as a replacement to the traditional\nproducts. On April 21, 2025, enforceable at law or in equity, and is expiration-based convergence\nCommission staff issued a Request for not subject to the notice-and-comment mechanism upon which a futures\nComment on the Trading and Clearing requirements of the Administrative contract typically relies.\nof \u2018\u2018Perpetual\u2019\u2019 Style Derivatives (the Procedure Act. Each contract submitted Perpetual contracts raise novel and\n\u2018\u2018Request\u2019\u2019).1 The Request solicited to the Commission under part 40 will complex questions relating to market\npublic input on the characteristics, use continue to be evaluated on its own structure, customer protection,\ncases, regulatory classification, and risks terms. resilience during periods of market\nof perpetual contracts. The Request was stress, and consistency with the Core\nissued in conjunction with a Request for II. The Structural Distinctiveness of Principles applicable to registrants\nComment on Trading and Clearing Perpetual Contracts under the CEA. For example, a\nDerivatives on a 24/7 Basis, which Traditional futures contracts rely perpetual contract\u2019s design and\nsought public input on the operational, primarily on a fixed expiration date to characteristics raise important\nsurveillance, clearing, and margin achieve convergence with the considerations with respect to DCM\nimplications of extending CFTC- underlying asset\u2019s spot price. Futures Core Principle 3, which requires that a\nregulated derivatives trading to a contracts have emerged as a primary DCM list only those contracts that are\ncontinuous basis.2 instrument in the U.S. derivatives not readily susceptible to\n On July 30, 2025, the President\u2019s markets for hedgers and traders to manipulation.7 For a traditional, cash-\nWorking Group on Digital Asset Markets effectively secure a price for an asset settled futures contract, the\nissued its report, Strengthening today in connection with a transaction susceptibility-to-manipulation analysis\nAmerican Leadership in Digital that will occur in the future. Price directed at the cash settlement reference\nFinancial Technology (the \u2018\u2018PWG convergence with the underlying spot price is an analysis of one moment in\nReport\u2019\u2019).3 The PWG Report price at expiration is thus inherent to time: the settlement reference price\nrecommended that the Commission and the design of a traditional futures must be reliable at expiry. For a\nthe U.S. Securities and Exchange contract and ultimately what makes perpetual contract, however, the\nCommission permit eligible market them a useful instrument for hedging reference must be reliable at every\nparticipants to access derivatives, and price discovery. funding interval, without interruption,\nincluding perpetual contracts, through A perpetual contract has no fixed for as long as the contract remains\nregulated intermediaries and that the expiration date through which it can active.\nagencies use existing exemptive and achieve convergence. It therefore It is therefore the Commission\u2019s view\ninterpretative authorities to provide requires a substitute mechanism to that perpetual contracts that reference\nnear-term clarity for innovative maintain relative price parity with the asset classes that are not contemplated\nderivatives products. underlying spot price of the asset that it in the Order should be submitted for\n As discussed, this policy statement is references. The mechanism that has Commission review and approval\nbeing released in conjunction with the emerged in the global crypto asset pursuant to the voluntary product\nOrder,4 which approved the listing of a markets is known as a funding rate, or approval process under Commission\nperpetual contract that references the a periodic payment between the long Regulation 40.3.\nspot price of bitcoin by a DCM as a and short sides of the contract, the The Commission notes that\nfutures contract. The Commission issues direction and magnitude of which is Regulation 40.2 permits registrants to\nthis policy statement to articulate, for generally determined by the difference self-certify new products where the\n submitting registrant determines that\n 1 CFTC Release No. 9069\u201325, Request for 5 These types of asset classes include, but are not the product complies with the CEA and\nComment on the Trading and Clearing of limited to, agricultural products, precious metals, Commission regulations thereunder.8\n\u2018\u2018Perpetual\u2019\u2019 Style Derivatives (April 21, 2025). equity securities, and narrow-based security\n 2 CFTC Release No. 9068\u201325, Request for\n However, given the novel characteristics\n indexes. Each asset class will raise different\nComment on Trading and Clearing Derivatives on considerations and merit independent analysis and of perpetual contracts, including their\na 24/7 Basis, (April 21, 2025). review based on their unique circumstances. For lack of a traditional expiration date and\n 3 President\u2019s Working Group on Digital Asset example, perpetual contracts are likely particularly the complex questions concerning,\nMarkets, Strengthening American Leadership in ill-suited for agricultural products based on the among others, market structure and\nDigital Financial Technology (July 30, 2025), considerations identified in the Order, while\navailable at https://www.whitehouse.gov/wp- perpetual contracts that reference equity securities customer protections, the Commission\ncontent/uploads/2025/07/Digital-Assets-Report- or narrow-based security indexes, among others,\nEO14178.pdf. would benefit from review by the Commission and 7 7 U.S.C. 7(d)(3); see also 17 CFR part 38, app.\n 4 See Order Approving KalshiEX LLC BTCPERP the U.S. Securities and Exchange Commission. C.\nFutures Contract, May 29, 2026. 6 17 CFR 40.3. 8 17 CFR 40.2.\n\n\n\n\n AR11\n\f Case 1:26-cv-02157-CKK Document 42-1 Filed 09/18/26 Page 4 of 23\n33162 Federal Register / Vol. 91, No. 106 / Wednesday, June 3, 2026 / Notices\n\nbelieves that the public interest is best Policy Statement Concerning the Listing received without change, including any\nserved by requiring perpetual contracts of Perpetual Contracts\u2014Commission personal identifiers or contact\nthat reference assets that are not Voting Summary information.\ncontemplated in the Order to undergo On this matter, Chairman Selig voted FOR FURTHER INFORMATION CONTACT: To\nCommission review and approval in the affirmative. No Commissioner request more information on this\npursuant to Commission Regulation voted in the negative. proposed information collection or to\n40.3. [FR Doc. 2026\u201311020 Filed 6\u20132\u201326; 8:45 am] obtain a copy of the proposal and\n associated collection instruments,\nIII. Submissions Under Commission BILLING CODE 6351\u201301\u2013P\n please write to the Office of the\nRegulation 40.3\n Assistant Secretary of War for\n The Commission believes that the DEPARTMENT OF DEFENSE International Armaments Control, 3010\nCommission Regulation 40.3 process Defense Pentagon, Washington, DC\nprovides important benefits for Office of the Secretary 20301\u20133010, Katherine Coyne, 703\u2013\nregulators, market participants, and the 545\u20135899.\n [Docket ID: DOD\u20132026\u2013OS\u20131222]\npublic. Prior review promotes SUPPLEMENTARY INFORMATION:\ntransparency, facilitates engagement Proposed Collection; Comment Title; Associated Form; and OMB\n Request Number: America First Arms Transfer\nbetween Commission staff and\n Strategy OMB Control Number 0704\u2013\nregistrants during product development, AGENCY: Office of the Under Secretary of AFAT.\nand provides greater regulatory clarity Defense for Acquisition and Needs and Uses: Effective execution\nfor market participants and members of Sustainment (OUSD(A&S)), Department of Executive Order 14383 requires\nthe public seeking to responsibly of Defense (DoD). immediate, up-to-date market\ninnovate within the CFTC\u2019s regulatory ACTION: 60-Day information collection intelligence regarding defense articles\nframework. notice. and the private sector\u2019s current\n In accordance with the purpose of the production capabilities, supply chain\nCEA, the Commission remains SUMMARY: In compliance with the dependencies, product offerings, and\ncommitted to promoting responsible Paperwork Reduction Act of 1995, the export readiness. This information\ninnovation and fair competition in the OUSD(A&S) announces a proposed collection is a strategic market research\nU.S. derivatives markets.9 The public information collection and seeks effort to inform execution of Executive\n public comment on the provisions Order 14383. It is not an acquisition or\nCommission believes that clear\n thereof. Comments are invited on: procurement action, and no federal\nregulatory pathways and transparent\n whether the proposed collection of contracts will be solicited or awarded\nsupervisory expectations are essential to information is necessary for the proper\nensuring that emerging technologies and based on these submissions. The\n performance of the functions of the analysis derived from this collection\nnovel financial products can develop agency, including whether the will facilitate the analytical\nresponsibly within regulated U.S. information shall have practical utility; prioritization of U.S. defense articles,\nmarkets rather than migrating to less the accuracy of the agency\u2019s estimate of enabling the curation of a\nregulated jurisdictions outside of the the burden of the proposed information comprehensively assessed data set for\nUnited States. collection; ways to enhance the quality, the Government.\n This policy statement is intended utility, and clarity of the information to Affected Public: Businesses or other\nsolely to provide the Commission\u2019s be collected; and ways to minimize the for-profit.\nviews concerning the listing of burden of the information collection on Annual Burden Hours: 375.\nperpetual contracts and does not alter or respondents, including through the use Number of Respondents: 150.\namend the CEA or the Commission\u2019s of automated collection techniques or Responses per Respondent: 5.\n other forms of information technology. Annual Responses: 750.\nregulations thereunder. Nothing in this Average Burden per Response: 30\npolicy statement is intended to be DATES: Consideration will be given to all\n comments received by August 3, 2026. minutes.\nbinding or foreclose the possibility that, Frequency: As required.\non appropriate facts and contract ADDRESSES: You may submit comments,\n identified by docket number and title, Dated: May 29, 2026.\ndesign, the Commission might in the\n by any of the following methods: Aaron T. Siegel,\nfuture address perpetual contracts\n Federal eRulemaking Portal: http:// Alternate OSD Federal Register Liaison\nthrough separate policy statements,\n www.regulations.gov. Follow the Officer, Department of Defense.\ninterpretative guidance, or the\nrulemaking process; the Commission instructions for submitting comments. [FR Doc. 2026\u201311025 Filed 6\u20132\u201326; 8:45 am]\n Mail: Department of Defense, Office of BILLING CODE 6001\u2013FR\u2013P\nmakes no determination as to that\n the Director of Administration and\npossibility here. Management, Oversight and Compliance\n Issued in Washington, DC, on May 29, Directorate, Regulatory Division, 4800 DEPARTMENT OF EDUCATION\n2026, by the Commission. Mark Center Drive, Mailbox #24, Suite\nChristopher Kirkpatrick, 05F16, Alexandria, VA 22350\u20131700. DEPARTMENT OF LABOR\nSecretary of the Commission. Instructions: All submissions received\n must include the agency name, docket Notice Announcing American History\n Note: The following appendix will not number and title for this Federal and Civics Education National\nappear in the Code of Federal Regulations. Register document. The general policy Activities Program Competition;\n for comments and other submissions Correction\n from members of the public is to make AGENCY: Department of Education;\n these submissions available for public Department of Labor.\n viewing on the internet at http://\n ACTION: Notice; correction.\n 9 7 U.S.C. 5(b). www.regulations.gov as they are\n\n\n AR12\n\f Case 1:26-cv-02157-CKK Document 42-1 Filed 09/18/26 Page 5 of 23\n\n S&C Draft of February 27, 2026\n CONFIDENTIAL\n [Kalshi Letterhead]\n 17 C.F.R. \u00a7 40.2(c)\n\n\n\n\nFebruary [\u25cf], 2026\n\nVia E-mail\n\nFrank Fisanich\nActing Director\nDivision of Market Oversight\nCommodity Futures Trading Commission\nThree Lafayette Centre\n1155 21st Street, N.W.\nWashington, DC 20581\n\nRe: Request for No-Action Position Concerning CFTC Regulation 40.2(c)\n\nDear Mr. Fisanich:\n\nKalshiEx LLC (Kalshi) is writing to request that the Division of Market Oversight (the\nDivision) of the Commodity Futures Trading Commission (Commission or CFTC) issue\na no-action letter pursuant to 17 C.F.R. \u00a7 140.99 confirming that the Division will not\nrecommend that the Commission stay Kalshi\u2019s listing of Perpetual Contracts (as\ndescribed in Part II below) under Regulation 40.2(c) 1 or commence enforcement action\nagainst Kalshi for a false certification, solely on the basis that Kalshi certifies the\nPerpetual Contracts as contracts of sale of a commodity for future delivery (futures\ncontracts), rather than swaps.\n\n I. Background on Kalshi\n\nKalshi was designated as a contract market (DCM) in 2020, when it became the first\nfederally-regulated platform for event-contract trading. Kalshi currently lists a wide\nvariety of fully collateralized event contracts on the outcomes of events ranging from\nglobal news, to macro-economic indicators to popular culture and sports. All contracts\ntraded on Kalshi are cleared by Kalshi Klear LLC (Klear), a registered designated\nclearing organization (DCO). Klear\u2019s order of registration currently limits its activities\nto clearing fully collateralized positions in swaps.\n\n II. Proposed Perpetual Contracts\n\nKlear has applied to the Commission to expand its DCO registration to permit it to\nclear margined positions. As an initial matter, Klear intends to clear margined\npositions in Perpetual Contracts, which will be listed on Kalshi and trade in its central\n\n1\n 17 C.F.R. \u00a7 40.2(c)\n\n CONFIDENTIAL TREATMENT REQUESTED BY KALSHI\n\n AR92\n\f Case 1:26-cv-02157-CKK Document 42-1 Filed 09/18/26 Page 6 of 23\n\n\n\n\nlimit order book, with pre- and post-trade transparency.\n\nEach Perpetual Contract will provide its holder either long or short, as applicable,\nexposure to the spot price of a standard, fixed unit amount of digital asset that is\nneither a security nor a representation of, or an interest in, a nonfinancial commodity\n(such a digital asset, a Subject Digital Asset). Initially, Perpetual Contracts will\nreference 0.0001 Bitcoin.\n\nPerpetual Contracts will provide exposure to a Subject Digital Asset by providing for\nthe holder to make or receive \u201cfunding\u201d payments that vary based on the price of the\nSubject Digital Asset relative to the price of a Perpetual Contract. When the Perpetual\nContract price exceeds the price of the Subject Digital Asset, payment will be due\nfrom the long-side holders to short-side holders, and vice versa if the price of the\nSubject Digital Asset exceeds the Perpetual Contract price.\n\nThis funding mechanism is intended to align the price of the Perpetual Contracts with\nthe price of the Subject Digital Asset by incentivizing market participants to (i) take on\nshort positions in the Perpetual Contracts when the Perpetual Contract price exceeds\nthe price of the Subject Digital Asset, thereby bringing the Perpetual Contract price\ndown towards the price of the Subject Digital Asset and (ii) take on long positions in\nthe Perpetual Contracts when the price of the Subject Digital Asset exceeds the\nPerpetual Contract price, increasing the Perpetual Contract price towards the price of\nthe Subject Digital Asset.\n\nSettlement in the Perpetual Contracts will occur twice daily and, upon settlement,\nKlear will calculate the mark-to-market value of all open positions in the Perpetual\nContracts and, accordingly, determine and distribute or collect margin obligations\nfrom all of its members with open long or short positions in the Perpetual Contracts. A\nmember\u2019s net margin obligation for each settlement period will include aggregate\nfunding payment obligations and/or entitlements accrued since the prior settlement\nperiod, in addition to other risk-based margin charges.\n\nThe Perpetual Contracts will have an indefinite (or \u201cperpetual\u201d) term. As such, they will\nnot expire on a fixed date. Instead, a member of Kalshi wishing to exit all or part of its\nposition in a Perpetual Contract will enter into an offsetting Perpetual Contract on Kalshi.\nBecause Perpetual Contracts will be standardized and centrally cleared by Klear, acting\nas DCO and central counterparty, they will be fungible with each other. The Perpetual\nContracts will not provide for physical settlement of the Subject Digital Asset, and will\nsettle solely via the cash payments and offset.\n\n III. Need for No-Action Position\n\nThere is considerable uncertainty regarding the regulatory categorization of perpetual-\nterm derivative contracts, such as the Perpetual Contracts, under the Commodity\nExchange Act (CEA) and Commission regulations thereunder. For example, in a recent\n\n 2\n\n CONFIDENTIAL TREATMENT REQUESTED BY KALSHI\n\n AR93\n\f Case 1:26-cv-02157-CKK Document 42-1 Filed 09/18/26 Page 7 of 23\n\n\n\n\nrequest for comment regarding \u201cperpetual\u201d style digital-asset derivatives, Commission\nStaff expressly requested public comment regarding the proper regulatory categorization\nof these contracts.2 That uncertainty presents challenges because swaps and futures\ncontracts are subject to substantially different regulatory frameworks. For example,\ncategorization of the Perpetual Contracts will affect matters such as the minimum initial\nmargin requirements for the Perpetual Contracts, 3 reporting obligations for Kalshi and\nKlear, and registration obligations for market participants trading in the Contracts. 4 As a\nresult, key aspects of Klear\u2019s pending application to amend its DCO registration depend\non the categorization of the Perpetual Contracts.\n\nThe Commission has previously made clear that a DCM may self-certify a product as a\nfutures contract, even if the product is \u201cindistinguishable in material economic effects\u201d\nfrom a swap.5 In the present instance, however, Kalshi cannot self-certify the Perpetual\nContracts in either category until the Commission approves Klear\u2019s application to amend\nits DCO registration because, in the absence of such approval, Kalshi could not list the\nPerpetual Contracts in compliance with the CEA and Commission regulations thereunder.\nOn the other hand, determining the categorization of the Perpetual Contracts is a\nprerequisite to amending Klear\u2019s DCO registration to permit the listing and clearing of\nthe Perpetual Contracts.6 Accordingly, Kalshi is seeking the requested no-action position\nso that Klear\u2019s DCO application can proceed on the basis that, following approval, Kalshi\ncan self-certify the Perpetual Contracts in a category that is consistent with how Klear\u2019s\napplication treats them.\n\n\n2\n CFTC, Request for Comment on the Trading and Clearing of \u201cPerpetual\u201d Style Derivatives question 13\n(Apr. 21, 2025). Further, the Commission has taken the view in past enforcement actions that certain\nperpetual-duration digital-asset derivative products constitute swaps. See, e.g., Complaint, CFTC v.\nChangpeng Zhao, et. al., No. 23-cv-01887 (March 27, 2023) (\u201cBinance\u201d); Complaint, CFTC v. MEK\nGlobal Limited, et. al., No. 24-cv-2255 (March 26, 2024); Complaint, CFTC v. Eisenberg, No. 23-cv-\n00173 (Jan. 9, 2023); Complaint, CFTC v. HDR Global Trading Limited, et. al., No. 20-cv-8132 (Oct. 1,\n2020); In the Matter of Deridex, Inc., CFTC No. 23-42 (Sept. 7, 2023). The Commission did not, however,\nanalyze address whether such products were futures contracts in any of these enforcement actions.\nMoreover, the products at issue in each of these cases differ from the Perpetual Contracts in that they were\nnot listed on Commission-regulated DCMs or centrally cleared by registered DCOs.\n3\n See Commission Regulation 39.13(g)(2)(ii), 17 C.F.R. 39.13(g)(2)(ii) (setting different minimum\nliquidation times for futures, options, and swaps).\n4\n These considerations are discussed in greater detail in Part IV.B. below.\n5\n Specifically, the Commission noted, in response to a market participant\u2019s question regarding whether a\nDCM can \u201clist for trading a futures contract regardless of whether it could be viewed as a swap if traded\nover-the-counter or on a [swap execution facility], since futures and swaps are indistinguishable in material\neconomic effects\u201d, that \u201c[i]f a DCM has a view that a particular product is a futures contract, it may self-\ncertify the contract consistent with that view.\u201d Further Definition of \u201cSwap,\u201d \u201cSecurity-Based Swap,\u201d and\n\u201cSecurity-Based Swap Agreement\u201d; Mixed Swaps; Security-Based Swap Agreement Record Keeping, 77\nFed. Reg. 48,208, 48303 (Aug. 13, 2012) (\u201c2012 Definitions Release\u201d).\n6\n For the same reasons, it would not be practicable for Kalshi to seek Commission review and approval of\nthe Perpetual Contracts under Regulation 40.3.\n 3\n\n CONFIDENTIAL TREATMENT REQUESTED BY KALSHI\n\n AR94\n\f Case 1:26-cv-02157-CKK Document 42-1 Filed 09/18/26 Page 8 of 23\n\n\n\n\n IV. Rationale for No-Action Position\n\nThe requested no-action position is supported by Kalshi\u2019s exercise of reasonable\ndiscretion to categorize the Perpetual Contracts for purposes of Regulation 40.2. In\naddition, regulating the Perpetual Contracts as futures contracts would reduce regulatory\narbitrage and promote competition.\n\n A. Kalshi Has Exercised Reasonable Discretion to Categorize the Perpetual\n Contracts for Purposes of Regulation 40.2\n\nRegulation 40.2 requires a DCM\u2019s product self-certification to include, among other\nitems, a concise explanation and analysis of the product\u2019s compliance with applicable\nprovisions of the CEA, including core principles, and the Commission\u2019s regulations\nthereunder.7 CEA Section 5(d)(1)(B)8 and Regulation 38.100(b)9 provide that a DCM\nhas reasonable discretion in establishing the manner in which it complies with the core\nprinciples. Through the analysis laid out below, Kalshi has exercised reasonable\ndiscretion by categorizing the Perpetual Contracts as futures contracts for purposes of\ncompliance with the core principles and other provisions of the CEA and Commission\nregulations thereunder.10\n\nFirst, we analyzed whether the Perpetual Contracts would fall within the CEA\u2019s \u201cswap\u201d\ndefinition. Section 1a(47) of the CEA 11 provides that, \u201c[e]xcept as provided in\nsubparagraph (B), the term \u2018swap\u2019 means any agreement, contract, or transaction\u201d that\nmeets any of six clauses set out in subparagraph (A) of that definition. Subparagraph (B)\nthen sets out ten exclusions from the \u201cswap\u201d definition. If the Perpetual Contracts fall\nwithin one of the exclusions, they are not swaps, regardless of whether they would\notherwise fit within one of the clauses set out in subparagraph (A). 12 One of those\nexclusions\u2014clause (B)(i)\u2014covers futures contracts. 13 We therefore turned to analyzing\nwhether the Perpetual Contracts would constitute futures contracts.\n\n\n7\n 17 C.F.R. \u00a7 40.2(a)(3)(v).\n8\n 7 U.S.C. \u00a7 7(d)(1)(B).\n9\n 17 C.F.R. \u00a7 38.100(b).\n10\n Consistent with self-certification under Regulation 40.2, Kalshi and Klear intend to treat the Perpetual\nContracts as futures contracts for purposes of compliance with the CEA and Commission regulations\nthereunder by themselves and their participants.\n11\n 7 U.S.C. \u00a7 1a(47).\n12\n Our analysis here is limited to the Perpetual Contracts. In contrast, the event contracts listed on Kalshi\ncan be \u201cstructured as options\u201d or \u201cfutures contracts.\u201d 73 Fed. Reg. 25,669, 25,670-71 (May 7, 2008).\n13\n The per se nature of this exclusion is illustrated by the treatment of traditional, cash-settled futures\ncontracts, such as a financially settled, quarterly Bitcoin contract. Such a contract provides for cash\nsettlement at quarterly expiry based on the price of Bitcoin, without any physical delivery. But for\n 4\n\n CONFIDENTIAL TREATMENT REQUESTED BY KALSHI\n\n AR95\n\f Case 1:26-cv-02157-CKK Document 42-1 Filed 09/18/26 Page 9 of 23\n\n\n\n\nNext, we evaluated the characteristics of the Perpetual Contracts against relevant judicial\nprecedent and Commission guidance. Neither the CEA nor Commission rules offer a\nfixed definition for what constitutes a \u201cfutures contract.\u201d Instead, the Commission and\nthe courts assess each transaction \u201cas a whole with a critical eye toward its underlying\npurpose\u201d14 by evaluating whether certain characteristics common to futures contracts are\npresent.15\n\nThe Commission has historically described futures contracts as \u201cstandardized contracts\nfor the purchase or sale of commodities which provide for future, as opposed to\nimmediate, delivery, and which are directly or indirectly offered to the general public and\ngenerally secured by earnest money, or \u2018margin\u2019 . . . [and that] are entered into primarily\nfor the purpose of assuming or shifting the risk of change in value of commodities, rather\nthan for transferring ownership of the actual commodities.\u201d16 Courts have similarly\nfocused on standardization, fungibility, and offset as the key characteristics of futures\ncontracts.17\n\n\nsubparagraph (B) of the \u201cswap\u201d definition, such a contract would fall within clause (A)(iii) of that\ndefinition as an agreement, contract, or transaction \u201cthat provides on an executory basis for the exchange,\non a fixed or contingent basis, of 1 or more payments based on the value or level of 1 or more . . .\ncommodities . . . and that transfers, as between the parties to the transaction, in whole or in part, the\nfinancial risk associated with a future change in any such value or level without also conveying a current or\nfuture direct or indirect ownership interest in an asset (including any enterprise or investment pool) or\nliability that incorporates the financial risk so transferred.\u201d 7 U.S.C. \u00a7 1a(47)(A)(iii). However, contracts\nof this sort are listed by other DCMs and regulated by the Commission as a futures contract because they\nfall within clause (B)(i), which provides, in relevant part, that \u201cthe term \u2018swap\u2019 does not include . . . any\ncontract of sale of a commodity for future delivery.\u201d 7 U.S.C. \u00a7 1a(47)(B)(i)\n\n14\n See CFTC v. Co Petro Marketing Group, Inc. 680 F.2d 573, 581 (9th Cir. 1982) (\u201cCo Petro\u201d).\n15\n See CFTC Interpretive Letter No. 98-73, Comm. Fut. L. Rep. \u00b627, 449 (Oct. 8, 1998) (\u201cLetter 98-73\u201d);\nsee, also CFTC Interpretive Letter No. 97-01, Comm. Fut. L. Rep. \u00b626, 937 (Dec. 12, 1996); CFTC v.\nUForex Consulting, 551 F.Supp.2d, 513, 529 (W.D.La. 2008), CFTC v. Fleury, 2010 WL 5146283 (S.D.\nFl.) at *7.\n16\n See In re Stovall, et. al., [1977-1980 Transfer Binder] Comm. Fut. L. Rep. (CCH) 20,941, p. 6 (CFTC\nDec. 6, 1979) (\u201cStovall\u201d). See, also Policy Statement Concerning Swap Transactions, 54 Fed. Reg. 30,694\n(July 21, 1989) (adopting a safe harbor from futures regulation for a swap if: the swap has individually\ntailored terms; there is an absence of exchange-style offset; there is no clearing organization or margin\nsystem; the swap is undertaken in connection with a line of business; and the swap is not marketed to the\npublic) and Exemption of Certain Swap Agreements, 58 Fed. Reg. 5,587 (Nov. 12, 1993) (adopting an\nexemption that, similarly, distinguished swaps from futures contracts based on whether: the swap\nagreement was entered into solely between sophisticated parties (\u201celigible swap participants\u201d) at the time\nsuch persons entered into the swap agreement; the swap agreement is not part of a fungible class of\nagreements that are standardized as to their material economic terms; the creditworthiness of any party\nhaving an actual or potential obligation under the swap agreement would be a material consideration in\nentering into or determining the terms of the swap agreement, including pricing, cost, or credit\nenhancement terms of the swap agreement; and the swap agreement is not entered into and traded on or\nthrough a multilateral transaction execution facility).\n17\n See, e.g., Co Petro at 579-80 (\u201cExcept for price, all the futures contracts for a specified commodity are\nidentical in quantity and other terms. The fungible nature of these contracts facilitates offsetting\n 5\n\n CONFIDENTIAL TREATMENT REQUESTED BY KALSHI\n\n AR96\n\f Case 1:26-cv-02157-CKK Document 42-1 Filed 09/18/26 Page 10 of 23\n\n\n\n\nMore recently, courts have turned away from the \u201ctotality of circumstances\u201d analysis\nreflected by the foregoing precedent. Instead, at least in the cases of contracts involving\nintangible commodities, courts have identified whether an executory contract is a futures\ncontract based on whether there is trading \u201cin the contract.\u201d 18 When evaluating whether\ntrading \u201cin the contract\u201d exists for a given contract, courts have looked to whether the\ncontract is standardized and fungible,19 as evidenced by (i) the contract trading at a fixed,\nstandardized unit quantity,20 (ii) each party\u2019s obligations being guaranteed by a clearing\nhouse that sets margin requirements,21 and (iii) the ability of holders to exit their\npositions by offset.22\n\nThe Perpetual Contracts will exhibit all of these futures contract characteristics: the\nPerpetual Contracts will have a fixed, standardized unit quantity; each party\u2019s obligations\nwill be guaranteed via novation to Klear, which will act as central counterparty; holders\nwill be able to exit their positions via offset; the Perpetual Contracts will be available to\nthe general public, including retail participants; parties will enter into the Perpetual\nContracts for the purpose of assuming or shifting the risk of change in value of the\nSubject Digital Asset, without the possibility of transferring ownership of the Subject\nDigital Asset; and the Perpetual Contracts will trade on the centralized market of a DCM.\n\n\n\ntransactions by which purchasers or sellers can liquidate their positions by forming opposite contracts.\u201d);\nsee, also Transnor (Bermuda) Ltd. v. BP N. Am. Petroleum, 738 F. Supp. 1472, 1492-93 (S.D.N.Y. 1990)\n(following Stovall and Co Petro to define what constitutes a futures contract) and Salomon Forex, Inc. v.\nTauber 8 F.3d 966, 971 (4th Cir. 1993) (\u201cTauber\u201d) (\u201cTo facilitate the development of a liquid market for\nthese transactions, these contracts are standardized and transferrable. Trading in futures seldom results in\nphysical livery of the subject commodity, since the obligations are often extinguished by offsetting\ntransactions that product a net profit or loss.\u201d).\n18\n See, e.g., CFTC v. Erskine, 512 F.3d 309, 325 (6th Cir. 2008) (\u201cErskine\u201d), CFTC v. Zelener, 373 F.3d\n861, 865 (7th Cir. 2004) (\u201cZelener\u201d), and Chicago Mercantile Exchange v. SEC, 883 F.2d 537, 542 (7th Cir.\n1989) (\u201cCME v. SEC\u201d). Courts evaluating the regulatory categorization of contracts on tangible\ncommodities have, at least in some instances, stuck with the \u201ctotality of circumstances\u201d approach from Co\nPetro. See Andersons, Inc. v. Horton Farms, Inc., 166 F.3d 308, 318 (6th Cir. 1998). Because the\nPerpetual Contracts are derivatives on Subject Digital Assets, which are intangible commodities, this\nrequest does not address the regulatory categorization of contracts on tangible commodities.\n19\n See Erskine at 325 (\u201cthe distinction [between futures and forward contracts] turns on standardization and\nfungibility of the contract.\u201d)\n20\n Id.\n21\n CME v. SEC at 542. Although the Dodd-Frank Act arguably changed the historical analysis, at least in\npart, by reducing the saliency of central clearing as a distinguishing factor of futures contracts, other\ncharacteristics remain relevant, given that even many centrally cleared swaps (such as interest rate swaps)\nare not fully standardized as to tenor or size (among other terms) and trading can take place on swap\nexecution facilities, which may lack the centralized market characteristics of a DCM because they can\npermit trading via request for quote in addition to an order book.\n22\n Zelener at 868, quoting Nagel v. ADM Investor Services, Inc., 217 F.3d 436, 441 (7th Cir. 2000) (noting\nthat a seller\u2019s promise to \u201csell another contract against which the buyer can offset the first contract\u201d makes\na contract \u201cwork as if fungible.\u201d)\n 6\n\n CONFIDENTIAL TREATMENT REQUESTED BY KALSHI\n\n AR97\n\f Case 1:26-cv-02157-CKK Document 42-1 Filed 09/18/26 Page 11 of 23\n\n\n\n\nFinally, we analyzed whether the Perpetual Contracts\u2019 indefinite duration should affect\ntheir categorization. We focused on this term of the Perpetual Contracts because courts\nhave, at times, described a futures contract as providing for the purchase or sale of a\ncommodity \u201cat a fixed date in the future,\u201d 23 or \u201con a date certain,\u201d24 or \u201cat or before a\nstated future time.\u201d25 Courts have not, however, viewed this characteristic as necessary\nto conclude that a contract is a futures contract. To the contrary, courts have repeatedly\nexplained that, \u201cWhile futures contracts generally have a specified future delivery date, or\nsettlement date, that date is not always specified thus allowing some futures contracts to\nbe of \u2018indefinite duration.\u2019\u201d26 For example, the Seventh Circuit in CME v. SEC\nconcluded that contracts of \u201cindefinite duration\u201d can possess the attribute of \u201cfuturity\u201d \u2013\ngenerally associated with futures contracts 27 \u2013 because futurity means \u201cvalue that is set in\nthe future\u201d and exists where contracts provide for future executory payment obligations,\nnot only where a contract has a final-settlement date and fixed term. 28 And, in Zelener,\nthe Commission took the position that the transactions at issue were futures contracts\nbecause customers\u2019 positions were held open indefinitely. 29\n\n\n23\n CME v. SEC at 542.\n24\n Tauber at 971.\n25\n Erskine at 323.\n26\n Standard Forex II, 1996 WL 435440, at *10, 1996 U.S. Dist. LEXIS 14778, at *29. See, also CFTC v.\nIntern. Fin. Servs., 323 F.Supp.2d 482. 498 (S.D.N.Y. 2004) (\u201cAs a matter of law, defendants wrongly\ncharacterize certain indicia of futures contract as essential features of such contracts. Principally, they argue\nat length that without a fixed date for future delivery, a transaction cannot be a futures contract within the\nCommission\u2019s jurisdiction. They cite no authority for this proposition, however\u201d) and CFTC v.\nInternational Foreign Curren., 334 F.Supp.2d 305, 312 (E.D.N.Y. 2004) (\u201c[T]he fact that Defendants\u2019\ncontracts failed to have a specified future delivery date is not determinative\u201d).\n27\n See CFTC v. First Lexington Group, LLC et. Al., 03 CV 9124 (GBD) (S.D.N.Y. Mar. 24, 2008).\n28\n CME v. SEC at 541. The contracts at issue in CME v. SEC \u2013 \u201cindex participations\u201d or \u201cIPs\u201d \u2013 were\nperpetual-term contracts based on the value of a securities index. The seller of an IP promised to pay the\nbuyer the value of the underlying index as measured on a \u201ccash-out day\u201d, while the buyer paid the seller for\nthe IP in cash on the date of the sale. Id. at 539. The IPs were settled on a quarterly basis, and upon\nsettlement the seller would owe the buyer a payment obligation approximating the value of dividends the\nstocks in the index paid out during the prior quarter. Id. The IPs thus resemble the Perpetual Contracts in\nthat (i) long-side holders were not subject to a binding, final-settlement date and (ii) they provide for\nexecutory payments (for the IPs, the seller\u2019s quarterly dividend payments; for the Contracts, the funding\npayments) determined following initiation of the contract. Although long-side holders of the IPs could\nexercise, on a quarterly or semi-annual basis, their privilege to \u201ccash-out\u201d and thereby trigger the short-side\nholder\u2019s obligation to pay the value of the underlying index, delivery on the \u201ccash-out\u201d date was not the\ndominant characteristic of the IPs as final-settlement was not a binding obligation on both parties to the\ncontract (i.e., long-side holders would ordinarily never face an obligation to cash-out).\n29\n See Zelener at 863. Although the Court ruled against the CFTC in Zelener, the facts in that case contrast\nwith those here. In that case, retail customers traded foreign exchange on an over-the-counter basis with a\ncompany controlled by the defendant, and the parties rolled their transactions so that customers were\nexposed to foreign currency prices without taking delivery. Zelener at 863. Notably, customers in that\n 7\n\n CONFIDENTIAL TREATMENT REQUESTED BY KALSHI\n\n AR98\n\f Case 1:26-cv-02157-CKK Document 42-1 Filed 09/18/26 Page 12 of 23\n\n\n\n\nBased on this analysis, Kalshi intends to categorize the Perpetual Contracts as futures\ncontracts in its Regulation 40.2 self-certification.\n\n B. Regulating the Perpetual Contracts as Futures Contracts Would Reduce\n Regulatory Arbitrage and Promote Competition\n\nAs indicated above, categorization of the Perpetual Contracts as futures contracts or\nswaps will have significant implications for their regulatory treatment, and the\nregulatory categorization of perpetual digital-asset derivative contracts is unclear under\nexisting law. The lack of clarity regarding the categorization of such contracts creates\nopportunity for unnecessary regulatory arbitrage due to the inconsistent treatment of\nsubstantively similar products.\n\nThe indefinite term of the Perpetual Contracts aligns them with similar products\noffered by non-U.S. exchanges. Meanwhile, other DCMs and DCOs have already\nbegun offering \u201cperpetual-style\u201d futures contracts that are designed to mimic the\neconomics of true perpetual contracts, but with an expiry date that presents unwanted\nrisk near the contracts\u2019 expiry. One of those DCMs and DCOs has also begun to offer\nretail leveraged spot digital asset transactions, which it offers as futures contracts\nunder Section 2(c)(2)(D) of the CEA.30 Those transactions also bear a high degree of\neconomic similarity to the Perpetual Contracts, but with the added potential for\ncustody and other risks associated with physical digital asset trading.\n\nConfirmation that Kalshi may self-certify the Perpetual Contracts under Regulation 40.2,\nlike these other transaction types, without the threat of a stay or other enforcement action\nfor false certification, would promote a consistent regulatory treatment across\neconomically equivalent transactions. In contrast, requiring such contracts to be\n\n\ncase did not purchase identical contracts, and their contracts did not provide a right of offset. Id. at 867.\nBy contrast, here each Perpetual Contract would be identical, and offset would be guaranteed by operation\nof Klear as central counterparty to all Perpetual Contracts bought or sold on Kalshi.\n30\n Section 2(c)(2)(D)(iii) of the CEA applies the exchange-trading requirement in Section 4(a) of the CEA\nto retail leveraged commodity transactions as though they are futures contracts. Congress added this\nprovision to the CEA as part of the Dodd-Frank Act, at the same time it amended the CEA to regulate\nswaps. We think it is notable that Congress elected, at that time, to treat retail leveraged commodity\ntransactions as though they are futures contracts, not swaps. Congress did so in order to fix the Zelener\n\u201cloophole\u201d by subjecting rolling spot contracts to futures regulation, not swaps regulation. See 156 Cong,\nRec. S5,924 (daily ed. July 15,2010) (statement of Sen. Lincoln); see also Hearing to Review Implications\nof the CFTC v. Zelener Case Before the Subcomm. on General Farm Commodities and Risk Management\nof the H. Comm. on Agriculture, 111th Cong. 52-664 (2009) (statement of Hon. Jim Marshall, United\nStates Representatives) (\u201cWhat we are talking about [regarding expanding the Commission\u2019s authority over\nretail commodity transactions] though is expanding the-well, correcting would be the argument the Zelener\ninterpretation of what a futures contract is. If in substance it is a futures contract, it is going to be regulated.\nIt doesn\u2019t matter how clever your draftsmanship is.\u201d). It would contradict Congressional intent to place the\nPerpetual Contracts, which likewise provide for cash-settled, leveraged retail exposure to commodities, in a\ndifferent regulatory category.\n\n 8\n\n CONFIDENTIAL TREATMENT REQUESTED BY KALSHI\n\n AR99\n\f Case 1:26-cv-02157-CKK Document 42-1 Filed 09/18/26 Page 13 of 23\n\n\n\n\ncategorized as swaps would subject them to higher initial margin requirements, 31\ntransaction reporting under Parts 43 and 45 of the Commission\u2019s regulations in addition\nto Part 16, and counting towards the swap dealer de minimis threshold. Applying those\nadditional requirements to the Perpetual Contracts would discourage trading in them,\neven though they exhibit less risk than the over-the-counter swaps those requirements\nwere designed to address. Regulating the Perpetual Contracts as swaps also would foster\ncontinuing incentives for U.S. market participants to seek to trade on unregulated, non-\nU.S. markets offering similar contracts without the protections of Commission regulation.\n\n V. Requested No-Action Position\n\nFor the foregoing reasons, and without asking that the Division or the Commission\nconcur with our categorization analysis, we request that the Division issue a no-action\nletter confirming that it will not recommend that the Commission stay Kalshi\u2019s listing of\nPerpetual Contracts under Regulation 40.2(c) or commence enforcement action against\nKalshi for a false certification, solely on the basis that Kalshi certifies the Perpetual\nContracts as futures contracts, rather than swaps. This no-action position would expire\non the effectiveness of any future rulemaking or interpretation by the Commission,\nguidance by the Division, or federal legislation addressing the categorization of Perpetual\nContracts.\n\n * * *\n\nThank you for your consideration of this letter. Please do not hesitate to contact me at [\u2022]\nwith any questions you may have.\n\nPursuant to Regulation 140.99(c)(3), the undersigned hereby certifies that the material\nfacts set forth herein are true and complete to the best of their knowledge, and undertakes\nthat, if at any time prior to the issuance of a no-action letter, any material representation\nmade in this letter ceases to be true and complete, they will promptly inform Commission\nStaff in writing of all materially changed facts and circumstances.\n\n\n\nRespectfully submitted,\n\n\n\n\n31\n See Note 3, supra.\n 9\n\n CONFIDENTIAL TREATMENT REQUESTED BY KALSHI\n\n AR100\n\fCase 1:26-cv-02157-CKK Document 42-1 Filed 09/18/26 Page 14 of 23\n\n Confidential Treatment Requested by Klear\n\n\n\n\n February 18, 2026\n\n\n MEMORANDUM TO: KalshiEX LLC\n Kalshi Klear LLC\n\n FROM: Colin D. Lloyd\n Natasha Vasan\n (Sullivan & Cromwell LLP)\n\n RE: Categorization of Proposed Perpetual Contracts\n\n\n Kalshi Klear LLC (\u201cKlear\u201d) has submitted to the Commodity Futures\n Trading Commission (the \u201cCommission\u201d or \u201cCFTC\u201d) an application to amend Klear\u2019s\n order of registration as a derivatives clearing organization (\u201cDCO\u201d) to permit it to clear\n perpetual contracts referencing Bitcoin (the \u201cContracts\u201d), which will be traded on\n KalshiEX LLC (\u201cKalshiEx\u201d), a board of trade designated by the Commission as a\n contract market (\u201cDCM\u201d).\n\n To assist Klear with this application, you have asked that we address the\n categorization of the Contracts under the Commodity Exchange Act (\u201cCEA\u201d) and\n Commission rules thereunder. Categorization of the Contracts will affect such matters as\n the scope of Klear\u2019s amended order of registration,1 the minimum initial margin\n requirements for the Contracts,2 reporting obligations for KalshiEx and Klear, and\n registration obligations for market participants trading in the Contracts.3 For the reasons\n and subject to the assumptions set out below, in our view the Commission should\n categorize the Contracts as contracts of sale of a commodity for future delivery (\u201cfutures\n contracts\u201d), not swaps.4\n\n\n\n\n 1\n Klear\u2019s existing order of registration permits it to clear fully collateralized swaps. Klear is applying to\n amend the order because the Contracts will be leveraged, not fully collateralized.\n 2\n See Commission Regulation 39.13(g)(2)(ii), 17 C.F.R. 39.13(g)(2)(ii) (setting different minimum\n liquidation times for futures, options, and swaps).\n 3\n These considerations are discussed in greater detail in Part II.C. below.\n 4\n The analysis herein is limited in scope to the Contracts and does not address any other contract listed or\n proposed to be listed by Kalshi, including event contracts. The regulatory categorization of any contract\n necessarily must take into account all of its terms, characteristics and other relevant facts and\n circumstances.\n\n\n AR101\n\fCase 1:26-cv-02157-CKK Document 42-1 Filed 09/18/26 Page 15 of 23\n\n Confidential Treatment Requested by Klear\n\n\n\n I. Factual Background\n\n Each Contract will provide its holder either long or short, as applicable,\n economic exposure to the spot price of Bitcoin5 by providing for the holder to make or\n receive \u201cfunding\u201d payments that vary based on the price of Bitcoin relative to the price of\n a Contract. When the Contract price exceeds the price of Bitcoin, payment will be due\n from the long-side holders to short-side holders, and vice versa if the price of Bitcoin\n exceeds the Contract price. This funding mechanism is intended to align the price of the\n Contracts with the Bitcoin price by incentivizing market participants to (i) take on short\n positions in the Contracts when the Contract price exceeds the price of Bitcoin, thereby\n bringing the Contract price down towards the Bitcoin price and (ii) take on long positions\n in the Contracts when the Bitcoin price exceeds the Contract price, increasing the\n Contract price towards the Bitcoin price.\n\n Klear will calculate funding payments due or owing to each Member with\n an open position in the Contracts every eight hours.6 A Member that holds Contract\n positions through a funding rate period (i.e., every eight hours) will accrue a funding\n payment obligation or entitlement. Contract settlement will take place in U.S. dollars,\n and will occur twice per day, at mid-day and end-of-day. Upon settlement, Klear will\n calculate the mark-to-market value of all open Contract positions and, accordingly,\n determine and distribute or collect margin obligations from all Members with open long\n or short positions in the Contracts. A Member\u2019s net margin obligation for each\n settlement period will include aggregate funding payment obligations and/or entitlements\n accrued since the prior settlement period, in addition to other risk-based margin charges\n (i.e., a base margin obligation, a liquidity risk charge and an anti-procyclicality buffer).\n\n Each Contract will have a standard notional size corresponding to 0.0001\n Bitcoin. They will trade on KalshiEx\u2019s central limit order book, with pre- and post-trade\n price transparency. The Contracts will be centrally cleared by Klear, acting as central\n counterparty. Standardization and central clearing will make the Contracts fungible with\n each other.\n\n The Contracts will have an indefinite (or \u201cperpetual\u201d) term. As such, they\n will not expire on a fixed date. Instead, a Member wishing to exit all or part of its\n position will enter into an offsetting Contract on KalshiEx. The Contracts will not\n provide for physical settlement of Bitcoin; they will solely settle via the cash payments\n described above.\n\n The indefinite term of the Contracts aligns them with similar products\n offered by non-U.S. exchanges. Klear has considered instead offering a product that has\n a fixed final settlement date but with margin payments adjusted to reflect spot prices,\n\n 5\n Klear will calculate the spot price of Bitcoin by reference to CF Benchmark\u2019s Bitcoin Real Time Index.\n 6\n Each funding payment will be the product of (i) a funding rate, determined by Klear pursuant to the Klear\n Margin Risk Framework, (ii) the Member\u2019s open position quantity, (iii) the Member\u2019s position side (long\n or short) and (iv) the Contract\u2019s mark-to-market price as determined by a 60-second volume-weighted\n average price formula.\n -2-\n AR102\n\fCase 1:26-cv-02157-CKK Document 42-1 Filed 09/18/26 Page 16 of 23\n\n Confidential Treatment Requested by Klear\n\n\n\n which some other DCMs and DCOs offer as \u201cperpetual-style\u201d futures. However, Klear\n has received feedback from its Members that the residual expiry risk associated with\n those products, and resulting need to \u201croll\u201d positions around expiry, presents risk\n management challenges and causes confusion, even if the expiry date is far into the\n future.\n\n II. Discussion and Analysis\n\n Below we address why, from legal and policy perspectives, the\n Commission should categorize the Contracts as futures contracts.\n\n A. The CEA\u2019s \u201cSwap\u201d Definition Per Se Excludes Futures Contracts\n\n Section 1a(47) of the CEA7 provides that, \u201c[e]xcept as provided in\n subparagraph (B), the term \u2018swap\u2019 means any agreement, contract, or transaction\u201d that\n meets any of six clauses set out in subparagraph (A) of that definition. Subparagraph (B)\n then sets out ten exclusions from the \u201cswap\u201d definition. The exclusions are not qualified\n in any respect; if an agreement, contract, or transaction falls within one of the exclusions,\n it is not a swap, regardless of whether it would otherwise fit within one of the clauses set\n out in subparagraph (A).\n\n The per se nature of these exclusions is illustrated by the treatment of\n securities options. Clause (A)(i) covers any agreement, contract, or transaction \u201cthat is a\n put, call, cap, floor, collar, or similar option of any kind that is for the purchase or sale, or\n based on the value, of 1 or more . . . . securities.\u201d8 Clause (B)(iii) then further provides\n that \u201cthe term \u2018swap\u2019 does not include . . . any put, call, straddle, option, or privilege on\n any security, certificate of deposit, or group or index of securities, including any interest\n therein or based on the value thereof, that is subject to . . . the Securities Act of 1933\n [and] the Securities Exchange Act of 1934.\u201d9 As a consequence, securities options are\n not categorized as swaps, even though they would, but for the exclusion in clause (B)(iii),\n fall within clause (A)(i) of the \u201cswap\u201d definition.\n\n The same is true for futures contracts. Take the financially settled Bitcoin\n futures contract listed by the Chicago Mercantile Exchange (\u201cCME\u201d). That contract\n provides for cash settlement at expiry (which is either monthly or quarterly) based on the\n price of Bitcoin, without any physical delivery.10 But for subparagraph (B) of the \u201cswap\u201d\n definition, this CME contract would fall within clause (A)(iii) of that definition as an\n agreement, contract, or transaction \u201cthat provides on an executory basis for the exchange,\n on a fixed or contingent basis, of 1 or more payments based on the value or level of 1 or\n more . . . commodities . . . and that transfers, as between the parties to the transaction, in\n\n 7\n 7 U.S.C. \u00a7 1a(47).\n 8\n 7 U.S.C. \u00a7 1a(47)(A)(i).\n 9\n 7 U.S.C. \u00a7 1a(47)(B)(iii).\n 10\n For more details about this contract\u2019s specifications, see\n https://www.cmegroup.com/markets/cryptocurrencies/bitcoin/bitcoin.contractSpecs.html.\n -3-\n AR103\n\fCase 1:26-cv-02157-CKK Document 42-1 Filed 09/18/26 Page 17 of 23\n\n Confidential Treatment Requested by Klear\n\n\n\n whole or in part, the financial risk associated with a future change in any such value or\n level without also conveying a current or future direct or indirect ownership interest in an\n asset (including any enterprise or investment pool) or liability that incorporates the\n financial risk so transferred.\u201d11 However, this contract is instead listed by CME and\n regulated by the Commission as a futures contract because it falls within clause (B)(i),\n which provides, in relevant part, that \u201cthe term \u2018swap\u2019 does not include . . . any contract\n of sale of a commodity for future delivery.\u201d12\n\n As these examples demonstrate, if the Contracts qualify as futures\n contracts, then they are not swaps.\n\n B. The Contracts Should Qualify as Futures Contracts\n\n Neither the CEA nor Commission rules offer a fixed definition for what\n constitutes a \u201cfutures contract.\u201d Instead, the Commission and the courts assess each\n transaction \u201cas a whole with a critical eye toward its underlying purpose\u201d13 by evaluating\n whether certain characteristics common to futures contracts are present.14 As laid out\n below, the Contracts exhibit all of the relevant characteristics of futures contracts.\n\n 1. The Contracts Exhibit the Characteristics of Futures Contracts\n\n The Commission has historically described futures contracts as\n \u201cstandardized contracts for the purchase or sale of commodities which provide for future,\n as opposed to immediate, delivery, and which are directly or indirectly offered to the\n general public and generally secured by earnest money, or \u2018margin\u2019 . . . [and that] are\n entered into primarily for the purpose of assuming or shifting the risk of change in value\n of commodities, rather than for transferring ownership of the actual commodities.\u201d15\n Courts have similarly focused on standardization, fungibility, and offset as the key\n characteristics of futures contracts.16\n\n\n\n 11\n 7 U.S.C. \u00a7 1a(47)(A)(iii).\n 12\n 7 U.S.C. \u00a7 1a(47)(B)(i).\n 13\n See CFTC v. Co Petro Marketing Group, Inc. 680 F.2d 573, 581 (9th Cir. 1982) (\u201cCo Petro\u201d).\n 14\n See CFTC Interpretive Letter No. 98-73, Comm. Fut. L. Rep. \u00b627, 449 (Oct. 8, 1998) (\u201cLetter 98-73\u201d);\n see, also CFTC Interpretive Letter No. 97-01, Comm. Fut. L. Rep. \u00b626, 937 (Dec. 12, 1996); CFTC v.\n UForex Consulting, 551 F.Supp.2d, 513, 529 (W.D.La. 2008), CFTC v. Fleury, 2010 WL 5146283 (S.D.\n Fl.) at *7.\n 15\n See In re Stovall, et. al., [1977-1980 Transfer Binder] Comm. Fut. L. Rep. (CCH) 20,941, p. 6 (CFTC\n Dec. 6, 1979) (\u201cStovall\u201d).\n 16\n See, e.g., Co Petro at 579-80 (\u201cExcept for price, all the futures contracts for a specified commodity are\n identical in quantity and other terms. The fungible nature of these contracts facilitates offsetting\n transactions by which purchasers or sellers can liquidate their positions by forming opposite contracts.\u201d);\n see, also Transnor (Bermuda) Ltd. v. BP N. Am. Petroleum, 738 F. Supp. 1472, 1492-93 (S.D.N.Y. 1990)\n (following Stovall and Co Petro to define what constitutes a futures contract) and Salomon Forex, Inc. v.\n Tauber 8 F.3d 966, 971 (4th Cir. 1993) (\u201cTauber\u201d) (\u201cTo facilitate the development of a liquid market for\n these transactions, these contracts are standardized and transferrable. Trading in futures seldom results in\n -4-\n AR104\n\fCase 1:26-cv-02157-CKK Document 42-1 Filed 09/18/26 Page 18 of 23\n\n Confidential Treatment Requested by Klear\n\n\n\n In the 1980s and 1990s, the Commission distinguished swaps from\n futures contracts based on similar characteristics. In 1989, the Commission adopted a\n safe harbor from futures regulation for a swap if: the swap has individually tailored\n terms; there is an absence of exchange-style offset; there is no clearing organization or\n margin system; the swap is undertaken in connection with a line of business; and the\n swap is not marketed to the public.17 In 1993, the Commission adopted an exemption\n that, similarly, distinguished swaps from futures contracts based on whether: the swap\n agreement was entered into solely between sophisticated parties (\u201celigible swap\n participants\u201d) at the time such persons entered into the swap agreement; the swap\n agreement is not part of a fungible class of agreements that are standardized as to their\n material economic terms; the creditworthiness of any party having an actual or potential\n obligation under the swap agreement would be a material consideration in entering into\n or determining the terms of the swap agreement, including pricing, cost, or credit\n enhancement terms of the swap agreement; and the swap agreement is not entered into\n and traded on or through a multilateral transaction execution facility.18\n\n More recently, courts have turned away from the \u201ctotality of\n circumstances\u201d analysis reflected by the foregoing precedent. Instead, at least in the\n cases of contacts involving intangible commodities, courts have identified whether an\n executory contract is a futures contract based on whether there is trading \u201cin the\n contract.\u201d19 When evaluating whether trading \u201cin the contract\u201d exists for a given contract,\n courts have looked to whether the contract is standardized and fungible,20 as evidenced\n by (i) the contract trading at a fixed, standardized unit quantity,21 (ii) each party\u2019s\n obligations being guaranteed by a clearing house that sets margin requirements,22 and (iii)\n the ability of holders to exit their positions by offset.23\n\n\n\n\n physical livery of the subject commodity, since the obligations are often extinguished by offsetting\n transactions that product a net profit or loss.\u201d).\n 17\n See Policy Statement Concerning Swap Transactions, 54 Fed. Reg. 30,694 (July 21, 1989).\n 18\n Exemption of Certain Swap Agreements, 58 Fed. Reg. 5,587 (Nov. 12, 1993).\n 19\n See, e.g., CFTC v. Erskine, 512 F.3d 309, 325 (6th Cir. 2008) (\u201cErskine\u201d), CFTC v. Zelener, 373 F.3d\n 861, 865 (7th Cir. 2004) (\u201cZelener\u201d), and Chicago Mercantile Exchange v. SEC, 883 F.2d 537, 542 (7th Cir.\n 1989) (\u201cCME v. SEC\u201d). Courts evaluating the regulatory categorization of contracts on tangible\n commodities have, at least in some instances, stuck with the \u201ctotality of circumstances\u201d approach from Co\n Petro. See Andersons, Inc. v. Horton Farms, Inc., 166 F.3d 308, 318 (6th Cir. 1998). The Contracts are\n derivatives on Bitcoin, an intangible commodity. Accordingly, the analysis herein does not address the\n regulatory categorization of contracts on tangible commodities.\n 20\n See Erskine at 325 (\u201cthe distinction [between futures and forward contracts] turns on standardization and\n fungibility of the contract.\u201d)\n 21\n Id.\n 22\n CME v. SEC at 542.\n 23\n Zelener at 868, quoting Nagel v. ADM Investor Services, Inc., 217 F.3d 436, 441 (7th Cir. 2000) (noting\n that a seller\u2019s promise to \u201csell another contract against which the buyer can offset the first contract\u201d makes\n a contract \u201cwork as if fungible.\u201d)\n -5-\n AR105\n\fCase 1:26-cv-02157-CKK Document 42-1 Filed 09/18/26 Page 19 of 23\n\n Confidential Treatment Requested by Klear\n\n\n\n The Dodd-Frank Act arguably changed this analysis, at least in part, by\n granting the Commission authority to mandate swaps for central clearing at DCOs24 and\n trading on DCMs and swap execution facilities (\u201cSEFs\u201d).25 These changes led market\n participants to ask the Commission to clarify that a DCM can \u201clist for trading a futures\n contract regardless of whether it could be viewed as a swap if traded over-the-counter or\n on a SEF, since futures and swaps are indistinguishable in material economic effects.\u201d26\n The Commission declined to provide that clarification, noting, \u201cPrior distinctions that the\n CFTC relied upon (such as the presence or absence of clearing) to distinguish between\n futures and swaps may no longer be relevant.\u201d27 The Commission then went on to say,\n \u201cIf a DCM has a view that a particular product is a futures contract, it may self-certify the\n contract consistent with that view.\u201d28\n\n Taken together, this precedent evidences a clear understanding, over\n multiple decades, that futures contracts are distinguished by standardization, fungibility,\n offset, and exchange trading. Even post-Dodd-Frank, those characteristics should remain\n relevant, given that even many centrally cleared swaps (such as interest rate swaps) are\n not fully standardized as to tenor or size (among other terms) and trading can take place\n on SEFs, which may lack the centralized market characteristics of a DCM (e.g., SEFs can\n permit trading via request for quote in addition to an order book). The Commission\u2019s\n post-Dodd-Frank guidance also makes clear that a DCM can self-certify a product as a\n futures contract, even if the product is \u201cindistinguishable in material economic effects\u201d\n from a swap.29\n\n The Contracts will exhibit all of the futures contract characteristics\n described above:\n\n \u2022 The Contracts will have a fixed, standardized unit quantity;\n\n \u2022 Each party\u2019s obligations will be guaranteed via novation to Klear,\n which will act as central counterparty;\n\n\n\n 24\n See 7 U.S.C. 2(h)(1).\n 25\n See 7 U.S.C. 2(h)(8).\n 26\n Further Definition of \u201cSwap,\u201d \u201cSecurity-Based Swap,\u201d and \u201cSecurity-Based Swap Agreement\u201d; Mixed\n Swaps; Security-Based Swap Agreement Record Keeping, 77 Fed. Reg. 48,208, 48303 (Aug. 13, 2012)\n (\u201c2012 Definitions Release\u201d).\n 27\n Id.\n 28\n Id.\n 29\n We recognize that the Dodd-Frank Act also envisions that a DCM can list swaps. In particular, Section\n 2(e) of the CEA makes it unlawful for a person that is not an eligible contract participant to enter into a\n swap that is not entered into on, or subject to the rules of, a DCM. 7 U.S.C. 2(e). This accords with the\n fact that some exchange-traded contracts can fall within subparagraph (A) of the \u201cswap\u201d definition without\n being excluded by subparagraph (B)\u2019s futures contract exclusion. For example, commodity options\n contracts (other than options on futures contracts) are swaps under the CEA. See 2012 Definitions Release\n at 48236.\n -6-\n AR106\n\fCase 1:26-cv-02157-CKK Document 42-1 Filed 09/18/26 Page 20 of 23\n\n Confidential Treatment Requested by Klear\n\n\n\n\n \u2022 Klear will set and collect margin;\n\n \u2022 Holders will be able to exit their positions via offset;\n\n \u2022 The Contracts will be available to the general public, including\n retail participants;\n\n \u2022 Parties will enter into the contracts for the purpose of assuming or\n shifting the risk of change in value of Bitcoin, without the\n possibility of transferring ownership of Bitcoin; and\n\n \u2022 The Contracts will trade on, and be self-certified as futures\n contracts by, a DCM.30\n\n 2. The Contracts\u2019 Indefinite Duration Does Not Make Them Swaps\n\n One characteristic that could be argued to distinguish the Contracts from a\n conventional futures contract is that they have an indefinite duration. Courts have, at\n times, described a futures contract as providing for the purchase or sale of a commodity\n \u201cat a fixed date in the future,\u201d31 or \u201con a date certain,\u201d32 or \u201cat or before a stated future\n time.\u201d33\n\n But that is a red herring. Courts have repeatedly explained that, \u201cWhile\n futures contracts generally have a specified future delivery date, or settlement date, that\n date is not always specified thus allowing some futures contracts to be of \u2018indefinite\n duration.\u2019\u201d34 For example, the Seventh Circuit in CME v. SEC concluded that contracts\n\n 30\n Trading on a DCM is not a necessary precondition for a transaction to qualify as a futures contract and be\n excluded from the \u201cswap\u201d definition. When legislating to enact Dodd-Frank, Congress considered the\n possibility of limiting the futures exclusion from the CEA\u2019s swap definition only to exchange-traded\n futures, but ultimately determined not to do so. See, H.R. 4173, as engrossed in the House of\n Representatives, excluded \"(i) any contract of sale of a commodity for future delivery \u2026 traded on or\n subject to the rules of any board of trade designated as a contract market under section 5 or 5f\u201d (emphasis\n added). See H.R. 4173 (E.H.), Section 3101. The Senate incorporated a similar exclusion in the Bill in its\n considerations in March 2010: \"any contract of sale of a commodity for future delivery or security futures\n product traded on or subject to the rules of any board of trade designated as a contract market under section\n 5 or 5f.\u201d (emphasis added); but see 7 U.S.C. 1a(47)(B)(i) (excluding the requirement that futures contracts\n subject to exclusion from the swap definition be exchange-traded). Also, Section 4(a) of the CEA still\n prohibits off-exchange futures contracts, without treating them as swaps. That said, the fact that the\n Contracts will trade on a DCM and be cleared by a DCO bolsters the conclusion that there is trading \u201cin the\n contract.\u201d\n 31\n CME v. SEC at 542.\n 32\n Tauber at 971.\n 33\n Erskine at 323.\n 34\n Standard Forex II, 1996 WL 435440, at *10, 1996 U.S. Dist. LEXIS 14778, at *29. See, also CFTC v.\n Intern. Fin. Servs., 323 F.Supp.2d 482. 498 (S.D.N.Y. 2004) (\u201cAs a matter of law, defendants wrongly\n characterize certain indicia of futures contract as essential features of such contracts. Principally, they\n argue at length that without a fixed date for future delivery, a transaction cannot be a futures contract within\n the Commission\u2019s jurisdiction. They cite no authority for this proposition, however\u201d) and CFTC v.\n -7-\n AR107\n\fCase 1:26-cv-02157-CKK Document 42-1 Filed 09/18/26 Page 21 of 23\n\n Confidential Treatment Requested by Klear\n\n\n\n of \u201cindefinite duration\u201d can possess the attribute of \u201cfuturity\u201d \u2013 generally associated with\n futures contracts35 - because futurity means \u201cvalue that is set in the future\u201d and exists\n where contracts provide for future executory payment obligations, not only where a\n contract has a final-settlement date and fixed term.36 And, in Zelener, the Commission\n itself took the position that the transactions at issue were futures contracts because\n customers\u2019 positions were held open indefinitely.37\n\n Accordingly, the Contracts\u2019 indefinite duration does not disqualify them\n from categorization as futures contracts. And, as discussed above, if the Contracts\n qualify as futures contracts, then they are not swaps.\n\n 3. Prior Commission Enforcement Actions Do Not Bear on\n Categorization of the Contracts\n\n The Commission has, in some of its enforcement actions, taken the view\n that perpetual-duration digital-asset derivative products constitute swaps.38 In all but one\n of these cases, the Commission looked only to features of the products at issue relevant to\n whether they fell within the scope of CEA Section 1a(47)(A)(iii). The Commission did\n not address whether such products were futures contracts, which would be excluded from\n the swap definition. As discussed above, the fact that a contract falls within the scope of\n CEA Section 1a(47)(A)(iii) because it \u201ctransfers, as between the parties to the transaction\n\n International Foreign Curren., 334 F.Supp.2d 305, 312 (E.D.N.Y. 2004) (\u201c[T]he fact that Defendants\u2019\n contracts failed to have a specified future delivery date is not determinative\u201d).\n 35\n See CFTC v. First Lexington Group, LLC et. Al., 03 CV 9124 (GBD) (S.D.N.Y. Mar. 24, 2008).\n 36\n CME v. SEC at 541. The contracts at issue in CME v. SEC \u2013 \u201cindex participations\u201d or \u201cIPs\u201d \u2013 were\n perpetual-term contracts based on the value of a securities index. The seller of an IP promised to pay the\n buyer the value of the underlying index as measured on a \u201ccash-out day\u201d, while the buyer paid the seller for\n the IP in cash on the date of the sale. Id. at 539. The IPs were settled on a quarterly basis, and upon\n settlement the seller would owe the buyer a payment obligation approximating the value of dividends the\n stocks in the index paid out during the prior quarter. Id. The IPs thus resemble the Contracts in that (i)\n long-side holders were not subject to a binding, final-settlement date and (ii) they provide for executory\n payments (for the IPs, the seller\u2019s quarterly dividend payments; for the Contracts, the funding payments)\n determined following initiation of the contract. Although long-side holders of the IPs could exercise, on a\n quarterly or semi-annual basis, their privilege to \u201ccash-out\u201d and thereby trigger the short-side holder\u2019s\n obligation to pay the value of the underlying index, delivery on the \u201ccash-out\u2019 date was not the dominant\n characteristic of the IPs as final-settlement was not a binding obligation on both parties to the contract (i.e.,\n long-side holders would ordinarily never face an obligation to cash-out).\n 37\n See Zelener at 863. Although the Court ruled against the CFTC in Zelener, the facts in that case contrast\n with those here. In that case, retail customers traded foreign exchange on an over-the-counter basis with a\n company controlled by the defendant, and the parties rolled their transactions so that customers were\n exposed to foreign currency prices without taking delivery. Zelener at 863. Notably, customers in that\n case did not purchase identical contracts, and their contracts did not provide a right of offset. Id. at 867.\n By contrast, here each Contract would be identical, and offset would be guaranteed by operation of Klear as\n central counterparty to all Contracts bought or sold on KalshiEx.\n 38\n See, e.g., Complaint, CFTC v. Changpeng Zhao, et. al., No. 23-cv-01887 (March 27, 2023) (\u201cBinance\u201d);\n Complaint, CFTC v. MEK Global Limited, et. al., No. 24-cv-2255 (March 26, 2024); Complaint, CFTC v.\n Eisenberg, No. 23-cv-00173 (Jan. 9, 2023); Complaint, CFTC v. HDR Global Trading Limited, et. al., No.\n 20-cv-8132 (Oct. 1, 2020); In the Matter of Deridex, Inc., CFTC No. 23-42 (Sept. 7, 2023).\n -8-\n AR108\n\fCase 1:26-cv-02157-CKK Document 42-1 Filed 09/18/26 Page 22 of 23\n\n Confidential Treatment Requested by Klear\n\n\n\n \u2026 the financial risk associated with a future change\u201d in the price of the underlying asset\n is not determinative of its regulatory categorization if the product qualifies as a futures\n contract.\n\n The only instance in which the Commission has addressed the possibility\n that perpetual-duration digital-asset derivative products could be excluded from the\n \u201cswap\u201d definition as futures contracts is in a single footnote in the Commission\u2019s\n response to Binance\u2019s Motion to Dismiss.39 However, as noted by the Commission,\n Binance failed to meaningfully address why the perpetual contracts at issue were futures\n contracts under the Zelener line of precedent; in particular, Binance relied on the sole\n point that positions in their contracts could be closed by offset, and they failed to\n reference any particular facts that indicated \u201ctrading in the contract.\u201d40\n\n Because no party in the Binance litigation, or any other litigation or\n enforcement action that we have identified, has raised the question of whether perpetual-\n duration digital-asset derivative products are futures contracts under Zelener, the\n Commission has yet to squarely address this question. In fact, in a recent request for\n comment regarding \u201cperpetual\u201d style digital-asset derivatives, Commission Staff\n expressly requested public comment regarding the proper regulatory categorization of\n these contracts.41\n\n C. Categorizing the Contracts as Futures Contracts Would Reduce\n Regulatory Arbitrage and Promote Competition\n\n As noted above, other DCMs and DCOs already offer \u201cperpetual-style\u201d\n futures contracts that are designed to mimic the economics of the Contracts, but with an\n expiry date that presents unwanted risk near those contracts\u2019 expiry. One of those DCMs\n and DCOs has also begun to offer retail leveraged Bitcoin spot transactions, which it\n offers as futures contracts under Section 2(c)(2)(D) of the CEA.42 Those transactions\n\n\n 39\n Plaintiff Response to Defendants\u2019 Motion to Dismiss, Binance at note 14 (Sept. 22, 2023).\n 40\n Brief in Support of Defendants\u2019 Motion to Dismiss, Binance at note 19 (July 27, 2023).\n 41\n CFTC, Request for Comment on the Trading and Clearing of \u201cPerpetual\u201d Style Derivatives question 13\n (Apr. 21, 2025).\n 42\n Section 2(c)(2)(D)(iii) of the CEA applies the exchange-trading requirement in Section 4(a) of the CEA\n to retail leveraged commodity transactions as though they are futures contracts. Congress added this\n provision to the CEA as part of the Dodd-Frank Act, at the same time it amended the CEA to regulate\n swaps. We think it is notable that Congress elected, at that time, to treat retail leveraged commodity\n transactions as though they are futures contracts, not swaps. Congress did so in order to fix the Zelener\n \u201cloophole\u201d by subjecting rolling spot contracts to futures regulation, not swaps regulation. See 156 Cong,\n Rec. S5,924 (daily ed. July 15,2010) (statement of Sen. Lincoln); see also Hearing to Review Implications\n of the CFTC v. Zelener Case Before the Subcomm. on General Farm Commodities and Risk Management\n of the H. Comm. on Agriculture, 111th Cong. 52-664 (2009) (statement of Hon. Jim Marshall, United\n States Representatives) (\u201cWhat we are talking about [regarding expanding the Commission\u2019s authority over\n retail commodity transactions] though is expanding the-well, correcting would be the argument the Zelener\n interpretation of what a futures contract is. If in substance it is a futures contract, it is going to be regulated.\n It doesn't matter how clever your draftsmanship is.\u201d). It would contradict Congressional intent to place the\n -9-\n AR109\n\fCase 1:26-cv-02157-CKK Document 42-1 Filed 09/18/26 Page 23 of 23\n\n Confidential Treatment Requested by Klear\n\n\n\n also bear a high degree of economic similarity to the Contracts, but with the added\n potential for custody and other risks associated with physical Bitcoin trading.\n\n Categorizing the Contracts as futures contracts, like these other transaction\n types, would ensure a consistent regulatory treatment across economically equivalent\n transactions. In contrast, categorizing the Contracts as swaps would subject them to\n higher initial margin requirements,43 transaction reporting under Parts 43 and 45 of the\n Commission\u2019s regulations in addition to Part 16,44 and counting towards the swap dealer\n de minimis threshold. Applying those additional requirements to the Contracts would\n discourage trading in the Contracts, even though they exhibit less risk than these others\n transaction types. It also would foster continuing incentives for U.S. market participants\n to seek to trade on unregulated, non-U.S. markets offering perpetual contracts similar to\n the Contracts without the protections of Commission regulation.\n\n III. Conclusion\n\n For the foregoing reasons, the Commission should categorize the\n Contracts as futures contracts, not swaps.\n\n * * *\n\n Please do not hesitate to contact me at (212) 558-3040 or\n lloydc@sullcrom.com if you have any questions regarding these matters.\n\n C.D.L.\n N.V.\n\n\n\n\n Contracts, which likewise provide for cash-settled, leveraged retail exposure to commodities, in a different\n regulatory category.\n 43\n See Note 2, supra.\n 44\n Commission Staff have previously provided a no-action letter to KalshiEx and Klear from Part 43 and 45\n reporting for fully collateralized swaps, but that letter would not apply to the Contracts because they are not\n fully collateralized.\n -10-\n AR110\n\f","ocr_status":1,"date_upload":"2026-09-21T05:11:12.942165-07:00","document_number":"42","attachment_number":1,"pacer_doc_id":"045012354314","is_available":true,"is_free_on_pacer":null,"is_sealed":false,"document_type":2,"description":"Exhibit Excerpted Administrative Record","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/494210144/","id":494210144,"tags":[],"absolute_url":"/docket/73500937/42/2/chicago-mercantile-exchange-inc-v-selig/","date_created":"2026-09-18T14:10:15.092615-07:00","date_modified":"2026-09-30T10:29:05.610076-07:00","sha1":"10049dd916361141378ae4699e86125fe5fbe9c0","page_count":1,"file_size":28145,"filepath_local":"recap/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.42.2.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.42.2.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 1:26-cv-02157-CKK Document 42-2 Filed 09/18/26 Page 1 of 1\n\n\n\n\n IN THE UNITED STATES DISTRICT COURT\n FOR THE DISTRICT OF COLUMBIA\n\n\n CHICAGO MERCANTILE EXCHANGE INC.,\n\n Plaintiff,\n\n \u2013v.\u2013 Case No. 26-cv-2157\n\n MICHAEL S. SELIG, et al.,\n\n Defendants.\n\n\n\n\n[PROPOSED] ORDER DENYING DEFENDANTS\u2019 MOTION FOR LEAVE\n TO TAKE JURISDICTIONAL DISCOVERY\n Upon consideration of Defendants\u2019 Motion for Leave to Take Discovery, Plaintiff\u2019s\n\nOpposition, and any reply thereto, it is hereby\n\n ORDERED that Defendants\u2019 Motion is denied.\n\n SO ORDERED.\n\n\n\nDated: _____________ _______________________________\n The Honorable Colleen Kollar-Kotelly\n United States District Judge\n\f","ocr_status":2,"date_upload":"2026-09-21T05:11:13.469752-07:00","document_number":"42","attachment_number":2,"pacer_doc_id":"045012354315","is_available":true,"is_free_on_pacer":null,"is_sealed":false,"document_type":2,"description":"Text of Proposed Order","acms_document_guid":""}],"date_created":"2026-09-18T14:10:10.925596-07:00","date_modified":"2026-09-18T14:34:45.240165-07:00","date_filed":"2026-09-18","time_filed":"16:40:31","entry_number":42,"recap_sequence_number":"2026-09-18.001","pacer_sequence_number":138,"description":"Memorandum in opposition to re [41] MOTION for Discovery on Facts Related to Plaintiff's Standing filed by CHICAGO MERCANTILE EXCHANGE INC.. (Attachments: (1) Exhibit Excerpted Administrative Record, (2) Text of Proposed Order)(Goelman, Aitan)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/477730231/","id":477730231,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/73500937/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/493333911/","id":493333911,"tags":[],"absolute_url":"","date_created":"2026-09-11T14:33:42.586692-07:00","date_modified":"2026-09-11T14:33:42.586712-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"","attachment_number":null,"pacer_doc_id":"","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"","acms_document_guid":""}],"date_created":"2026-09-11T14:33:42.570078-07:00","date_modified":"2026-09-11T14:33:42.570100-07:00","date_filed":"2026-09-08","time_filed":null,"entry_number":null,"recap_sequence_number":"2026-09-08.002","pacer_sequence_number":null,"description":"Set/Reset Deadlines: Amicus Brief due by 12/4/2026. Cross Motions due by 11/20/2026. Response to Cross Motions due by 12/14/2026. Discovery due by 11/13/2026. Response due by 10/2/2026. Reply due by 10/16/2026. (dot)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/477729484/","id":477729484,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/73500937/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/493333137/","id":493333137,"tags":[],"absolute_url":"/docket/73500937/41/chicago-mercantile-exchange-inc-v-selig/","date_created":"2026-09-11T14:29:12.243454-07:00","date_modified":"2026-09-11T14:29:12.254000-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"41","attachment_number":null,"pacer_doc_id":"045012339011","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Discovery","acms_document_guid":""}],"date_created":"2026-09-11T14:29:12.213590-07:00","date_modified":"2026-09-11T14:33:42.806264-07:00","date_filed":"2026-09-11","time_filed":"17:02:30","entry_number":41,"recap_sequence_number":"2026-09-11.003","pacer_sequence_number":136,"description":"MOTION for Discovery on Facts Related to Plaintiff's Standing by COMMODITY FUTURES TRADING COMMISSION, MICHAEL S. SELIG. (Attachments: # 1 Text of Proposed Order)(Minot, Martin) (Entered: 09/11/2026)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/477714604/","id":477714604,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/73500937/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/493317949/","id":493317949,"tags":[],"absolute_url":"/docket/73500937/40/chicago-mercantile-exchange-inc-v-selig/","date_created":"2026-09-11T13:11:52.165565-07:00","date_modified":"2026-09-28T12:50:46.466236-07:00","sha1":"7a6ad31ddad792b714fe95cfbbaebe188cdedcb3","page_count":5,"file_size":1590187,"filepath_local":"recap/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.40.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.40.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 1:26-cv-02157-CKK Document 40 Filed 09/11/26 Page 1 of 5\n\n\n\n\n UNITED STATES DISTRICT COURT\n FOR THE DISTRICT OF COLUMBIA\n\n CHICAGO MERCANTILE EXCHANGE\n INC.,\n Case No. l :26-cv-02157-CKK\n Plaintiff,\n\n V.\n MICHAELS . SELIG, in his official capacity as\n Chairman of the Commodity Futures Trading\n Commission; COMMODITY FUTURES\n TRADING COMMISSION,\n\n Defendants.\n\n\n\n PROTECTIVE ORDER GOVERNING CONFIDENTIAL DOCUMENTS IN THE\n ADMINISTRATTVE RECORD\n Defendants Michael S. Selig, in his official capacity as Chairman of the Commodity\n\nFutures Trading Commission, and the Commodity Futures Trading Commission (\"CFTC\") are\n\nincluding certain documents in the administrative record that contain confidential or sensitive\n\ncommercial, \u00b7 financial and/or business information of a CFTC-designated contract market\n\n(\"DCM\") that is not a party to this litigation. To facilitate the production, review and use of these\n\ndocuments in this case, the parties jointly request that the Court enter an order to protect this\n\nconfidential information (\"Protective Order\").\n\n Accordingly, It is hereby STIPULATED, AGREED, and ORDERED as follows:\n\n 1. Defendants shall designate as \"Confidential\" any portions of the record that contain\n\nconfidential or sensitive commercial, financial and/or business information. Specifically,\n\nDefendants will identify any such portions as \"Confidential\" by highlighting the text.\n\n 2. This Protective Order shall govern the use of all portions of the administrative\n\nrecord designated as Confidential by Defendants. All Parties to this Action and their attorneys, as\n\f Case 1:26-cv-02157-CKK Document 40 Filed 09/11/26 Page 2 of 5\n\n\n\n\nwell as non-party participants, shall comply with the terms and procedures set forth below with\n\nrespect to documents and materials designated as \"Confidential\" by Defendants. Notwithstanding\n\nanything else contained herein, nothing in this Protective Order shall in any way limit the right of\n\na producing or supplying party (hereinafter \"Producing Party\") to make whatever use it deems\n\nappropriate of its own documents.\n\n 3. Under this Protective Order, Defendants shall have the right to identify and\n\ndesignate any portions of the administrative record as \"Confidential\" when Defendants in good\n\nfaith believe it contains information that is proprietary, confidential, commercially sensitive\n\ninformation protected by the Commodity Exchange Act, CFTC regulations, or the Trade Secrets\n\nAct, or contains other confidential research, development, or commercial information as such\n\nterms are used in Fed. R. Civ. P. 26(c)(l)(G).\n\n 4. Absent consent of Defendants or an order from this Court, materials designated\n\nConfidential pursuant to this Protective Order and/or any information derived therefrom shall only\n\nbe disclosed to or made available by: ( 1) outside counsel who have appeared on behalf of a party\n\nin this litigation (\"counsel of record\"), including their partners, counsel, associates, and staff; (2)\n\nany third-party witness retained only for the purposes of this litigation; (3) the Court and its\n\npersonnel, (4) any other person or entity authorized by law; and (5) any other person only upon\n\norder of the Court or upon stipulation of the parties.\n\n 5. Counsel of record are responsible for employing reasonable measures to control\n\naccess to and distribution of information designated Confidential and shall keep all documents\n\ndesignated as Confidential secure within their possession. Each person accessing or receiving\n\ninformation designated as Confidential shall receive, process, use, store, maintain, disclose,\n\ntransmit, backup, handle extracts of, and dispose of such information: (i) only in compliance with\n\n\n\n 2\n\f Case 1:26-cv-02157-CKK Document 40 Filed 09/11/26 Page 3 of 5\n\n\n\n\nthe terms of this Protective Order; (ii) in a location and manner sufficient to protect such\n\ninformation from unauthorized access or disclosure; and (iii) in accordance with industry standard\n\nsafeguards and applicable Federal information confidentiality and security laws and regulations.\n\n 6. To the extent that any materials designated as Confidential under this Protective\n\nOrder are filed with the Court, they shall only be submitted under seal, with a motion to seal\n\nconsistent with this Court's Local Rule 5.1 (h). Plaintiff Chicago Mercantile Exchange, Inc. (CME)\n\nwill redact any portion of a document that it files on the public docket that quotes from or otherwise\n\nreproduces material designated as Confidential. Defendants must file a response justifying the\n\nredactions within seven (7) business days. If Defendants fail to do so or the Court does not grant\n\nthe motion to seal, the information will no longer be designated as Confidential.\n\n 7. The parties agree to be bound by the terms of this Protective Order pending its entry\n\nby the Court or pending the entry of an alternative thereto which is satisfactory to all parties, and\n\nany violation of its terms shall be subject to the same sanctions and penalties as if this Protective\n\nOrder had been entered by the Court.\n\n 8. Defendants may withdraw the designation of Confidential at any time during the\n\npendency of this matter.\n\n 9. If Plaintiff disputes whether any portions of the administrative record are properly\n\ndesignated as Confidential, the parties agree to attempt to resolve such dispute among themselves.\n\nThe parties must confer and make reasonable efforts to resolve their differences. In the event the\n\nparties cannot resolve the dispute, the designation of confidentiality may be challenged upon\n\nmotion. The non-party DCM that designated the material as confidential to the CFTC shall have\n\nthe opportunity to appear to protect its interests.\n\f Case 1:26-cv-02157-CKK Document 40 Filed 09/11/26 Page 4 of 5\n\n\n\n\n 10. Within sixty (60) days of the conclusion of this litigation and any appeal thereof,\n\n all material treated as Confidential under this Protective Order shall be destroyed or returned. Any\n\n work product that contains Confidential information under this Protective Order shall be destroyed.\n\n Counsel ofrecord for Plaintiff shall make written confirmations of compliance with this return or\n\n destruction requirement to counsel for Defendants not more than ninety (90) days after final\n\n termination of this litigation. The Clerk of the Court may return to counsel for Defendants, or\n\n destroy, any Confidential sealed material at the end of the litigation, including any appeals.\n\n 11. After the conclusion of this litigation, the provisions of this Protective Order shall\n\n continue to be binding and this Court shall retain jurisdiction over all persons who have access to\n\n documents designated as Confidential produced pursuant to this Protective Order for the purpose\n\n of enforcement of this Protective Order, including any appropriate sanctions for violations.\n\n\n\n\nContinue on next page.\n\n\n\n\n 4\n\f Case 1:26-cv-02157-CKK Document 40 Filed 09/11/26 Page 5 of 5\n\n\n\n\nDated: September 11, 2026 Respectfully submitted by:\n\n\nIsl Aitan D. Goe/man Isl M Jordan Minot\nAitan D. Goelman (D.C. Bar No. 446636) M. Jordan Minot (DC Bar No. 1722554)\nIvano M. Ventresca (D.C. Bar No. 1045769)\nBrian J. Beaton, Jr. (D.C. Bar No. 90020963) TYLER S. BADGLEY\n General Counsel\nZUCKERMAN SPAEDER LLP M. JORDAN MINOT\n2100 L Street NW, Suite 400 Deputy General Counsel\nWashington, DC 20037 ANDREW J. WEISBERG\nTel: (202) 778-1800 Senior Assistant General Counsel\nFax: (202) 822-8136 HENRY J. DICKMAN\nagoelman@zuckerman.com Senior Assistant General Counsel\niventresca@zuckerman.com CARLIN METZGER\nbbeaton@zuckerman.com Senior Assistant General Counsel\n\nAttorneys for Plaintiff Chicago Mercantile U.S. Commodity Futures Trading Commission\nExchange, Inc. 1155 21st Street, NW\n Washington, DC 20581\n Tel: (202) 209-1087\n Fax: (202) 418-5567\n tbadgley@cftc.gov\n jminot@cftc.gov\n aweisberg@cftc.gov\n hdickman@cftc.gov\n cmetzger@cftc.gov\n\n Attorneys for Defendants Michael S. Selig and\n CFTC.\n\n\n\n\n SO ORDERED.\n\n\n\n\n COLLEEN KOLLAR-KOTELLY\n United States District Judge\n\n\n\n\n 5\n\f","ocr_status":2,"date_upload":"2026-09-11T14:34:03.411908-07:00","document_number":"40","attachment_number":null,"pacer_doc_id":"045012338654","is_available":true,"is_free_on_pacer":null,"is_sealed":false,"document_type":1,"description":"Order on Motion for Protective Order","acms_document_guid":""}],"date_created":"2026-09-11T13:11:52.120190-07:00","date_modified":"2026-09-11T14:33:42.789463-07:00","date_filed":"2026-09-11","time_filed":"16:10:59","entry_number":40,"recap_sequence_number":"2026-09-11.002","pacer_sequence_number":134,"description":"ORDER granting 39 Motion for Protective Order. It is hereby STIPULATED, AGREED, and ORDERED that this Protective Order shall govern as stated herein. Signed by Judge Colleen Kollar-Kotelly on 9/11/2026. (lcckk3) (Entered: 09/11/2026)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/477650473/","id":477650473,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/73500937/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/493251737/","id":493251737,"tags":[],"absolute_url":"/docket/73500937/39/chicago-mercantile-exchange-inc-v-selig/","date_created":"2026-09-11T07:35:20.510431-07:00","date_modified":"2026-09-11T08:27:24.558070-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"39","attachment_number":null,"pacer_doc_id":"045012337024","is_available":false,"is_free_on_pacer":null,"is_sealed":false,"document_type":1,"description":"Protective Order","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/493251764/","id":493251764,"tags":[],"absolute_url":"/docket/73500937/39/1/chicago-mercantile-exchange-inc-v-selig/","date_created":"2026-09-11T07:35:23.126236-07:00","date_modified":"2026-09-28T13:55:09.298642-07:00","sha1":"6d175106e4337b29cb23b725ab00068a89cb5b14","page_count":5,"file_size":138892,"filepath_local":"recap/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.39.1.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.39.1.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 1:26-cv-02157-CKK Document 39-1 Filed 09/11/26 Page 1 of 5\n\n\n\n\n UNITED STATES DISTRICT COURT\n FOR THE DISTRICT OF COLUMBIA\n\n CHICAGO MERCANTILE EXCHANGE\n INC.,\n Case No. 1:26-cv-02157-CKK\n Plaintiff,\n\n v.\n MICHAEL S. SELIG, in his official capacity as\n Chairman of the Commodity Futures Trading\n Commission; COMMODITY FUTURES\n TRADING COMMISSION,\n\n Defendants.\n\n\n\n [PROPOSED] PROTECTIVE ORDER GOVERNING CONFIDENTIAL DOCUMENTS\n IN THE ADMINISTRATIVE RECORD\n\n Defendants Michael S. Selig, in his official capacity as Chairman of the Commodity\n\nFutures Trading Commission, and the Commodity Futures Trading Commission (\u201cCFTC\u201d) are\n\nincluding certain documents in the administrative record that contain confidential or sensitive\n\ncommercial, financial and/or business information of a CFTC-designated contract market\n\n(\u201cDCM\u201d) that is not a party to this litigation. To facilitate the production, review and use of these\n\ndocuments in this case, the parties jointly request that the Court enter an order to protect this\n\nconfidential information (\u201cProtective Order\u201d);\n\n Accordingly, It is hereby STIPULATED, AGREED, and ORDERED as follows:\n\n 1. Defendants shall designate as \u201cConfidential\u201d any portions of the record that contain\n\nconfidential or sensitive commercial, financial and/or business information. Specifically,\n\nDefendants will identify any such portions as \u201cConfidential\u201d by highlighting the text.\n\n 2. This Protective Order shall govern the use of all portions of the administrative\n\nrecord designated as Confidential by Defendants. All Parties to this Action and their attorneys, as\n 1\n\f Case 1:26-cv-02157-CKK Document 39-1 Filed 09/11/26 Page 2 of 5\n\n\n\n\nwell as non-party participants, shall comply with the terms and procedures set forth below with\n\nrespect to documents and materials designated as \u201cConfidential\u201d by Defendants. Notwithstanding\n\nanything else contained herein, nothing in this Protective Order shall in any way limit the right of\n\na producing or supplying party (hereinafter \u201cProducing Party\u201d) to make whatever use it deems\n\nappropriate of its own documents.\n\n 3. Under this Protective Order, Defendants shall have the right to identify and\n\ndesignate any portions of the administrative record as \u201cConfidential\u201d when Defendants in good\n\nfaith believe it contains information that is proprietary, confidential, commercially sensitive\n\ninformation protected by the Commodity Exchange Act, CFTC regulations, or the Trade Secrets\n\nAct, or contains other confidential research, development, or commercial information as such\n\nterms are used in Fed. R. Civ. P. 26(c)(1)(G).\n\n 4. Absent consent of Defendants or an order from this Court, materials designated\n\nConfidential pursuant to this Protective Order and/or any information derived therefrom shall only\n\nbe disclosed to or made available by: (1) outside counsel who have appeared on behalf of a party\n\nin this litigation (\u201ccounsel of record\u201d), including their partners, counsel, associates, and staff; (2)\n\nany third-party witness retained only for the purposes of this litigation; (3) the Court and its\n\npersonnel, (4) any other person or entity authorized by law; and (5) any other person only upon\n\norder of the Court or upon stipulation of the parties.\n\n 5. Counsel of record are responsible for employing reasonable measures to control\n\naccess to and distribution of information designated Confidential and shall keep all documents\n\ndesignated as Confidential secure within their possession. Each person accessing or receiving\n\ninformation designated as Confidential shall receive, process, use, store, maintain, disclose,\n\ntransmit, backup, handle extracts of, and dispose of such information: (i) only in compliance with\n\n\n\n 2\n\f Case 1:26-cv-02157-CKK Document 39-1 Filed 09/11/26 Page 3 of 5\n\n\n\n\nthe terms of this Protective Order; (ii) in a location and manner sufficient to protect such\n\ninformation from unauthorized access or disclosure; and (iii) in accordance with industry standard\n\nsafeguards and applicable Federal information confidentiality and security laws and regulations.\n\n 6. To the extent that any materials designated as Confidential under this Protective\n\nOrder are filed with the Court, they shall only be submitted under seal, with a motion to seal\n\nconsistent with this Court\u2019s Local Rule 5.1(h). Plaintiff Chicago Mercantile Exchange, Inc. (CME)\n\nwill redact any portion of a document that it files on the public docket that quotes from or otherwise\n\nreproduces material designated as Confidential. Defendants must file a response justifying the\n\nredactions within seven (7) business days. If Defendants fail to do so or the Court does not grant\n\nthe motion to seal, the information will no longer be designated as Confidential.\n\n 7. The parties agree to be bound by the terms of this Protective Order pending its entry\n\nby the Court or pending the entry of an alternative thereto which is satisfactory to all parties, and\n\nany violation of its terms shall be subject to the same sanctions and penalties as if this Protective\n\nOrder had been entered by the Court.\n\n 8. Defendants may withdraw the designation of Confidential at any time during the\n\npendency of this matter.\n\n 9. If Plaintiff disputes whether any portions of the administrative record are properly\n\ndesignated as Confidential, the parties agree to attempt to resolve such dispute among themselves.\n\nThe parties must confer and make reasonable efforts to resolve their differences. In the event the\n\nparties cannot resolve the dispute, the designation of confidentiality may be challenged upon\n\nmotion. The non-party DCM that designated the material as confidential to the CFTC shall have\n\nthe opportunity to appear to protect its interests.\n\n\n\n\n 3\n\f Case 1:26-cv-02157-CKK Document 39-1 Filed 09/11/26 Page 4 of 5\n\n\n\n\n 10. Within sixty (60) days of the conclusion of this litigation and any appeal thereof,\n\nall material treated as Confidential under this Protective Order shall be destroyed or returned. Any\n\nwork product that contains Confidential information under this Protective Order shall be destroyed.\n\nCounsel of record for Plaintiff shall make written confirmations of compliance with this return or\n\ndestruction requirement to counsel for Defendants not more than ninety (90) days after final\n\ntermination of this litigation. The Clerk of the Court may return to counsel for Defendants, or\n\ndestroy, any Confidential sealed material at the end of the litigation, including any appeals.\n\n 11. After the conclusion of this litigation, the provisions of this Protective Order shall\n\ncontinue to be binding and this Court shall retain jurisdiction over all persons who have access to\n\ndocuments designated as Confidential produced pursuant to this Protective Order for the purpose\n\nof enforcement of this Protective Order, including any appropriate sanctions for violations.\n\n\n\n Dated: September 11, 2026 Respectfully submitted by:\n\n\n /s/ Aitan D. Goelman _ /s/ M. Jordan Minot _\n Aitan D. Goelman (D.C. Bar No. 446636) M. Jordan Minot (DC Bar No. 1722554)\n Ivano M. Ventresca (D.C. Bar No. 1045769)\n Brian J. Beaton, Jr. (D.C. Bar No. 90020963) TYLER S. BADGLEY\n General Counsel\n ZUCKERMAN SPAEDER LLP M. JORDAN MINOT\n 2100 L Street NW, Suite 400 Deputy General Counsel\n Washington, DC 20037 ANDREW J. WEISBERG\n Tel: (202) 778-1800 Senior Assistant General Counsel\n Fax: (202) 822-8136 HENRY J. DICKMAN\n agoelman@zuckerman.com Senior Assistant General Counsel\n iventresca@zuckerman.com CARLIN METZGER\n bbeaton@zuckerman.com Senior Assistant General Counsel\n\n Attorneys for Plaintiff Chicago Mercantile U.S. Commodity Futures Trading Commission\n Exchange, Inc. 1155 21st Street, NW\n Washington, DC 20581\n Tel: (202) 209-1087\n Fax: (202) 418-5567\n\n 4\n\f Case 1:26-cv-02157-CKK Document 39-1 Filed 09/11/26 Page 5 of 5\n\n\n\n\n tbadgley@cftc.gov\n jminot@cftc.gov\n aweisberg@cftc.gov\n hdickman@cftc.gov\n cmetzger@cftc.gov\n\n Attorneys for Defendants Michael S. Selig and\n CFTC\n\n\n\nSO ORDERED:\n\n\n____________________________________\nHON. COLLEEN KOLLAR-KOTELLY\nUNITED STATES DISTRICT JUDGE\n\n\n\n\n 5\n\f","ocr_status":2,"date_upload":"2026-09-11T07:56:14.088921-07:00","document_number":"39","attachment_number":1,"pacer_doc_id":"045012337025","is_available":true,"is_free_on_pacer":null,"is_sealed":false,"document_type":2,"description":"Text of Proposed Order","acms_document_guid":""}],"date_created":"2026-09-11T07:35:20.484550-07:00","date_modified":"2026-09-11T14:33:42.766297-07:00","date_filed":"2026-09-11","time_filed":"10:34:24","entry_number":39,"recap_sequence_number":"2026-09-11.001","pacer_sequence_number":132,"description":"Joint MOTION for Protective Order by Plaintiff Chicago Mercantile Exchange, Inc. and Defendants Michael S. Selig and CFTC by COMMODITY FUTURES TRADING COMMISSION, MICHAEL S. SELIG. (Attachments: # 1 Text of Proposed Order)(Minot, Martin) (Entered: 09/11/2026)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/477551164/","id":477551164,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/73500937/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/493149139/","id":493149139,"tags":[],"absolute_url":"","date_created":"2026-09-10T12:23:49.175090-07:00","date_modified":"2026-09-10T12:23:49.175102-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"","attachment_number":null,"pacer_doc_id":"","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Set/Reset Deadlines","acms_document_guid":""}],"date_created":"2026-09-10T12:23:49.161994-07:00","date_modified":"2026-09-10T12:23:49.162007-07:00","date_filed":"2026-09-10","time_filed":"14:58:19","entry_number":null,"recap_sequence_number":"2026-09-10.001","pacer_sequence_number":null,"description":"","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/477452006/","id":477452006,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/73500937/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/493046576/","id":493046576,"tags":[],"absolute_url":"/docket/73500937/38/chicago-mercantile-exchange-inc-v-selig/","date_created":"2026-09-09T16:25:56.266196-07:00","date_modified":"2026-09-09T16:25:57.380274-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"38","attachment_number":null,"pacer_doc_id":"045012333293","is_available":false,"is_free_on_pacer":null,"is_sealed":false,"document_type":1,"description":"Amicus Brief","acms_document_guid":""}],"date_created":"2026-09-09T16:25:56.241307-07:00","date_modified":"2026-09-11T14:33:42.748589-07:00","date_filed":"2026-09-09","time_filed":"19:25:16","entry_number":38,"recap_sequence_number":"2026-09-09.007","pacer_sequence_number":128,"description":"AMICUS BRIEF by HYPERLIQUID POLICY CENTER. (zjm) (Entered: 09/09/2026)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/477339391/","id":477339391,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/73500937/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/492931666/","id":492931666,"tags":[],"absolute_url":"","date_created":"2026-09-09T07:37:51.609917-07:00","date_modified":"2026-09-09T07:37:51.609925-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"","attachment_number":null,"pacer_doc_id":"","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Order on Motion for Leave to File Amicus Brief","acms_document_guid":""}],"date_created":"2026-09-09T07:37:51.597458-07:00","date_modified":"2026-09-11T14:33:42.730525-07:00","date_filed":"2026-09-09","time_filed":"10:36:58","entry_number":null,"recap_sequence_number":"2026-09-09.006","pacer_sequence_number":null,"description":"MINUTE ORDER: On consideration of Hyperliquid Policy Center's 36 Motion for Leave to File a Brief as Amicus Curiae in Support of Defendants, it is hereby ORDERED that the motion is GRANTED. The Clerk of the Court is respectfully directed to enter Hyperliquid Policy Center's brief as amicus curiae onto the electronic case docket in this matter. Signed by Judge Colleen Kollar-Kotelly on 9/9/2026. (lcckk3)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/477339318/","id":477339318,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/73500937/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/492931575/","id":492931575,"tags":[],"absolute_url":"","date_created":"2026-09-09T07:37:06.018780-07:00","date_modified":"2026-09-09T07:37:06.018790-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"","attachment_number":null,"pacer_doc_id":"","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Order on Motion for Leave to Appear Pro Hac Vice","acms_document_guid":""}],"date_created":"2026-09-09T07:37:06.005233-07:00","date_modified":"2026-09-11T14:33:42.701556-07:00","date_filed":"2026-09-09","time_filed":"10:36:07","entry_number":null,"recap_sequence_number":"2026-09-09.005","pacer_sequence_number":null,"description":"MINUTE ORDER: The 35 Motion for Leave for Attorney Elias S. Kim to Appear Pro Hac Vice is DENIED WITHOUT PREJUDICE because Attorney Kim is an active member of the District of Columbia Bar practicing on behalf of an organization with an office in this District. Attorney Kim may enter an appearance in this case after becoming a member of this Court's Bar pursuant to Local Rule of Civil Procedure 83.8. Signed by Judge Colleen Kollar-Kotelly on 9/9/2026. 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No. 1:26-cv-02157\n\nMICHAEL S. SELIG, in his official capacity as Hon. Colleen Kollar-Kotelly\nChairman of the Commodity Futures Trading\nCommission, and COMMODITY FUTURES\nTRADING COMMISSION,\n\n Defendants.\n\n BRIEF OF HYPERLIQUID POLICY CENTER AS AMICUS CURIAE\n IN SUPPORT OF DEFENDANTS\n\n\n\n Elizabeth B. Prelogar\n Counsel of Record\n Elias S. Kim (pro hac vice application\n pending)\n Claire Groden\n COOLEY LLP\n 1299 Pennsylvania Avenue NW, Suite 700\n Washington, DC 20004\n (202) 842-7800\n eprelogar@cooley.com\n\n Counsel for Amicus Curiae Hyperliquid\n Policy Center\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 2 of 37\n\n\n\n\n CORPORATE DISCLOSURE STATEMENT\n\n I, the undersigned, counsel of record for Hyperliquid Policy Center, certify that to the best\n\nof my knowledge and belief, Hyperliquid Policy Center has no parent companies, subsidiaries, or\n\naffiliates. No company owns at least 10% of the stock of Hyperliquid Policy Center.\n\n\n\n Dated: September 9, 2026 /s/ Elizabeth B. Prelogar\n Elizabeth B. Prelogar\n\n Counsel for Amicus Curiae Hyperliquid\n Policy Center\n\n\n\n\n i\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 3 of 37\n\n\n TABLE OF CONTENTS\n\n Page\n\nINTERESTS OF AMICUS CURIAE .......................................................................................... viii\nINTRODUCTION .......................................................................................................................... 1\nARGUMENT .................................................................................................................................. 4\nI. PERPETUALS BUILD ON LONGSTANDING ECONOMIC PRINCIPLES TO\n EXPAND ACCESS TO FUTURES MARKETS ............................................................... 4\n A. A Perpetual Is A Futures Contract That Allows Market Participants To Take\n A Position On The Price Of An Asset For An Indefinite Period Of Time ............. 4\n B. Perpetuals Continue An Enduring Pattern Of Futures-Market Innovation ............. 7\n C. Perpetuals Increase Trading Volume And Attract New Traders To Futures\n Markets ................................................................................................................. 14\nII. CME HAS NOT ADEQUATELY ALLEGED THAT IT HAS SUFFERED AN\n INJURY IN FACT ............................................................................................................ 16\n A. Competitor Standing Requires Demonstrating That The Challenged Agency\n Action Intensifies Competition, Thereby Injuring The Plaintiff As A Matter\n Of Economic Logic ............................................................................................... 16\n B. The CFTC\u2019s Order Did Not Intensify Competition And Thereby Injure\n CME As A Matter Of Economic Logic ................................................................ 19\nIII. CME IS AN UNSUITABLE CHALLENGER TO THE CFTC ORDER ........................ 20\n A. Plaintiffs Must Assert Interests Within The Zone Of Interests Protected By\n The Invoked Statute .............................................................................................. 21\n B. CME\u2019s Asserted Competitive Interest Does Not Fall Within The Zone Of\n Interests Protected By The Commodity Exchange Act\u2019s Swap Provisions .......... 23\nCONCLUSION ............................................................................................................................. 25\n\n\n\n\n ii\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 4 of 37\n\n\n TABLE OF AUTHORITIES\n\n Page(s)\n\nCases\n\nAir Excursions LLC v. Yellen,\n 66 F.4th 272 (D.C. Cir. 2023) ......................................................................................17, 18, 20\n\nAm. Inst. of Certified Pub. Accts. v. IRS,\n 804 F.3d 1193 (D.C. Cir. 2015) ...............................................................................................17\n\nAmgen v. Smith,\n 357 F.3d 103 (D.C. Cir. 2004) .................................................................................................21\n\nArnold Tours, Inc. v. Camp,\n 400 U.S. 45 (1970) .............................................................................................................23, 25\n\nAss\u2019n of Data Processing Serv. Orgs. v. Camp,\n 397 U.S. 150 (1970) .................................................................................................................23\n\nBd. of Trade of City of Chi. v. Christie Grain & Stock Co.,\n 198 U.S. 236 (1905) .................................................................................................................10\n\nBloomberg L.P. v. CFTC,\n 949 F. Supp. 2d 91 (D.D.C. 2013) ...........................................................................................24\n\nCastro v. Scanlan,\n 86 F.4th 947 (1st Cir. 2023) .....................................................................................................17\n\nCement Kiln Recycling Coal. v. EPA,\n 255 F.3d 855 (D.C. Cir. 2001) .................................................................................................23\n\nCFTC v. Zelener,\n 373 F.3d 861 (7th Cir. 2004) .....................................................................................................4\n\nClarke v. Sec. Indus. Ass\u2019n,\n 479 U.S. 388 (1987) .....................................................................................................22, 23, 25\n\nCSL Plasma Inc. v. U.S. Customs & Border Prot.,\n 33 F.4th 584 (D.C. Cir. 2022) ............................................................................................22, 23\n\nFirst Nat\u2019l Bank & Trust Co. v. Nat\u2019l Credit Union Admin.,\n 988 F.2d 1272 (D.C. Cir. 1993) .........................................................................................22, 25\n\nHardin v. Ky. Utils. Co.,\n 390 U.S. 1 (1968) .....................................................................................................................23\n\nHazardous Waste Treatment Council v. Thomas,\n 885 F.2d 918 (D.C. Cir. 1989) ........................................................................................... 21-23\n\n\n iii\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 5 of 37\n\n\n TABLE OF AUTHORITIES\n (continued)\n\n Page(s)\n\nInt\u2019l Union of Bricklayers & Allied Craftsmen v. Meese,\n 761 F.2d 798 (D.C. Cir. 1985) ...........................................................................................18, 20\n\nIn re Interest Rate Swaps Antitrust Litig.,\n 261 F. Supp. 3d 430 (S.D.N.Y. 2017)......................................................................................24\n\nInvest. Co. Inst. v. Camp,\n 401 U.S. 617 (1971) ...........................................................................................................22, 23\n\nInvest. Co. Inst. v. CFTC,\n 891 F. Supp. 2d 162 (D.D.C. 2012) .........................................................................................24\n\nKERM, Inc. v. FCC,\n 353 F.3d 57 (D.C. Cir. 2004) ...................................................................................................18\n\nLexmark Int\u2019l, Inc. v. Static Control Components, Inc.,\n 572 U.S. 118 (2014) ...........................................................................................................17, 21\n\nLiquid Carbonic Indus. Corp. v. FERC,\n 29 F.3d 697 (D.C. Cir. 1994) ...................................................................................................23\n\nLujan v. Defenders of Wildlife,\n 504 U.S. 555 (1992) .................................................................................................................16\n\nLujan v. Nat\u2019l Wildlife Fed.,\n 497 U.S. 871 (1990) .................................................................................................................21\n\nMatch-E-Be-Nash-She-Wish Band of Pottawatomi Indians v. Patchak,\n 567 U.S. 209 (2012) ...........................................................................................................21, 22\n\nMD Pharm., Inc. v. DEA,\n 133 F.3d 8 (D.C. Cir. 1998) .........................................................................................18, 22, 23\n\nMendoza v. Perez,\n 754 F.3d 1002 (D.C. Cir. 2014) ...............................................................................................18\n\nMova Pharm. Corp. v. Shalala,\n 140 F.3d 1060 (D.C. Cir. 1998) .........................................................................................22, 23\n\nNat\u2019l Credit Union Admin. v. First Nat\u2019l Bank & Trust Co.,\n 522 U.S. 479 (1998) .................................................................................................................23\n\nNew World Radio, Inc. v. FCC,\n 294 F.3d 164 (D.C. Cir. 2002) ...........................................................................................17, 19\n\n\n\n iv\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 6 of 37\n\n\n TABLE OF AUTHORITIES\n (continued)\n\n Page(s)\n\nSave Jobs USA v. DHS,\n 942 F.3d 504 (D.C. Cir. 2019) .................................................................................................19\n\nShays v. FEC,\n 414 F.3d 76 (D.C. Cir. 2005) ...................................................................................................17\n\nSherley v. Sebelius,\n 610 F.3d 69 (D.C. Cir. 2010) .......................................................................................17, 18, 20\n\nTwin Rivers Paper Co. v. SEC,\n 934 F.3d 607 (D.C. Cir. 2019) .....................................................................................22, 24, 25\n\nU.S. Telecom Ass\u2019n v. FCC,\n 295 F.3d 1326 (D.C. Cir. 2002) ...............................................................................................18\n\nUnited Transp. Union v. I.C.C.,\n 891 F.2d 908 (D.C. Cir. 1989) .................................................................................................18\n\nStatutes\n\n5 U.S.C. \u00a7 702 ................................................................................................................................21\n\n7 U.S.C.\n \u00a7 1a(47) ....................................................................................................................................23\n \u00a7 5(a) ......................................................................................................................................7, 8\n \u00a7 5(b) ........................................................................................................................................24\n \u00a7 7b-3(a) ...................................................................................................................................25\n\nPub. L.\n No. 93-463, 88 Stat. 1389 ........................................................................................................10\n No. 111\u2013203, 124 Stat. 1376 ...................................................................................................24\n\nMiscellaneous\n\nAlexander Belozertsev & Jerry W. Markham, Commodity Exchanges and the\n Privatization of the Agricultural Sector in the Commonwealth of Independent\n States\u2014Needed Steps in Creating a Market Economy, 55 Law & Contemp.\n Probs. 119 (1992) .......................................................................................................................9\n\nHachmi Ben Ameur et al., Revisiting the relationship between spot and futures\n markets: evidence from commodity markets and NARDL framework (July 27,\n 2021) ..........................................................................................................................................8\n\nAnastasia Chernikova, How Perpetual Futures Could Make More Assets\n Tradable, Forbes (Aug. 27, 2026) ...........................................................................................16\n\n\n v\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 7 of 37\n\n\n TABLE OF AUTHORITIES\n (continued)\n\n Page(s)\n\nCrude Oil Futures \u2013 Contract Specs, CME Group ....................................................................5, 15\n\nAdam K. Gehr, Jr., Undated Futures Markets, 8 Journal of Futures Markets 89 (1988) ..............12\n\nJohn Paul Hampstead, BitMEX CEO: what a trader wants, what a trader needs\n (July 23, 2018) .........................................................................................................................14\n\nSongrun He et al., Fundamentals of Perpetual Futures (Dec. 2024) ........................................6, 13\n\nHyperliquid Policy Center, Comment RE Joint Request for Comment on Further\n Definition of \u201cSwap\u201d and \u201cSecurity-Based Swap\u201d and on Alternative\n Compliance (Aug. 24, 2026) .............................................................................................. 14-16\n\nHyperliquid Policy Center, Perpetual futures as complements to dated futures\n (Aug. 21, 2026) ..................................................................................................................16, 19\n\nHyperliquid Policy Center, Statement in Connection with the Meeting of the\n Innovation Advisory Committee (Aug. 27, 2026) ....................................................................14\n\nIn the Matter of the Application of KalshiEX LLC for Designation as a Contract\n Market (Nov. 3, 2020) .............................................................................................................20\n\nIndex Futures, ScienceDirect .........................................................................................................11\n\nLeo Melamed, Evolution of the International Monetary Market,\n 8 Cato Journal 393 (1988)........................................................................................................11\n\nMarket Begins Trading in Eurodollar Futures, N.Y. Times (Dec. 10, 1981) ...............................11\n\nMercatus Energy, The Fundamentals of Oil & Gas Hedging \u2013 Futures .........................................7\n\nGregory J. Millman, Futures and Options Markets, The Concise Encyclopedia of\n Economics ..................................................................................................................................8\n\nAnthony Neuberger, Using Futures Contracts for Corporate Hedging: The Problem of\n Expiry and a Possible Solution, 2 European Fin. Mgmt. 263 (1996) ................................12, 13\n\nNYMEX Rulebook: Clearing House and Performance Bonds, CME Group ...................................5\n\nS. Rep. No. 111-176, 111th Cong., 2d Sess. (2010) ......................................................................24\n\nJoseph Santos, A History of Futures Trading in the United States, EH.Net\n Encyclopedia (Mar. 16, 2008) ............................................................................................. 8-10\n\n\n\n\n vi\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 8 of 37\n\n\n TABLE OF AUTHORITIES\n (continued)\n\n Page(s)\n\nRobert Shiller, Measuring Asset Values for Cash Settlement in Derivatives\n Markets: Hedonic Repeated Measures Indices and Perpetual Futures, NBER\n Technical Working Paper #131 (Dec. 1992) ...........................................................................12\n\nSpecification Index, trade[XYZ] ......................................................................................................7\n\n\n\n\n vii\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 9 of 37\n\n\n\n\n INTERESTS OF AMICUS CURIAE 1\n\n Amicus curiae is Hyperliquid Policy Center (HPC), an independent research and advocacy\n\norganization dedicated to advancing a clear, regulated path for Americans to access onchain\n\nmarkets, including those available on the Hyperliquid blockchain. HPC engages directly with\n\nlawmakers and regulators, produces rigorous technical research, and champions practical\n\nregulatory frameworks for onchain markets, with a focus on perpetual derivatives and onchain\n\nfinancial infrastructure. Recently, HPC published a research paper conveying its findings that\n\nperpetual futures trading does not degrade the quality of trading on incumbent markets.\n\n HPC submits this brief to explain the nature of perpetual futures and to demonstrate that,\n\nbecause of the market-expanding nature of the CFTC\u2019s challenged action, the Chicago Mercantile\n\nExchange (CME) lacks competitor standing to bring this suit. HPC also seeks to demonstrate that\n\nCME\u2019s interest in imposing more burdensome regulations on its competitors does not fall within\n\nthe zone of interests contemplated by the Commodity Exchange Act\u2019s classification of swaps.\n\n\n\n\n1\n Pursuant to Local Civil Rule 7(o)(5), which incorporates Federal Rule of Appellate Procedure\n29(a)(4), amicus represents that this brief was authored by counsel for amicus and not by counsel\nfor any party in whole or in part. No outside contributions were made to the preparation or\nsubmission of this brief.\n\n viii\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 10 of 37\n\n\n\n\n INTRODUCTION\n\n This suit is an attempt by the Chicago Mercantile Exchange (CME) to halt innovation in\n\nthe U.S. futures markets. Earlier this year, the Commodity Futures Trading Commission (CFTC)\n\napproved the first-ever true perpetual futures contract listed on a U.S.-regulated exchange. In\n\ndoing so, it confirmed that every designated contract market (DCM), including CME, can list the\n\nsame type of contract. At least for now, CME has decided not to. But instead of leaving other\n\nfutures exchanges to make their own commercial decisions, CME asks this Court to take the\n\ndecision out of their hands. This anticompetitive effort must fail.\n\n Although rarely the focus of public discourse, the U.S. futures markets are fundamental to\n\nour daily lives. These markets allow companies and individuals to plan, borrow, and invest by\n\nconnecting them with counterparties willing to take on risks that they cannot carry alone. As a\n\nresult, they are the primary mechanism for managing risk across the real economy: without them,\n\nfarmers could not price crops before planting; airlines could not fix fuel costs before flying; and\n\nhomebuyers could not lock in mortgage rates before closing. The same markets anchor the prices\n\nof essential commodities in global trade.\n\n The strength of the U.S. futures markets has always depended on their capacity to change\n\nwith the times. Futures markets began with grain in 1850s Chicago and, through decades of\n\nrelentless innovation, grew to encompass thousands of different products and serve millions of\n\npeople across the world. CME deserves much of the credit. It brought the first currency futures,\n\ncash-settled contracts, and electronic futures trading platform into the United States.\n\n Perpetuals are the latest product of that tradition of innovation. Put simply, a perpetual is\n\na futures contract with no expiration date. Perpetuals regulated under the Commodity Exchange\n\nAct (CEA) share all the defining features of dated futures: they have standardized terms, match on\n\na central order book, require margin on both sides, clear through a registered clearing house, and\n\n\n 1\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 11 of 37\n\n\n\n\nmay be closed through an offsetting trade. The only distinction is the mechanism that each uses\n\nto track the price of the underlying asset. Dated futures converge with that price through\n\nexpiration, while perpetuals converge through a \u201cfunding rate,\u201d a small periodic payment between\n\nparticipants that have taken long positions and participants that have taken short positions. Each\n\nproduct is useful to address different types of risk. Dated futures hedge risks that end on a known\n\ndate, such as crop harvests or bond maturities. Perpetuals hedge risks that do not, such as fuel\n\nneeds or long-term investment portfolios.\n\n There is already vast global demand for perpetuals. Last year, the notional value of\n\nperpetuals traded in global markets was nearly $90 trillion, with contracts referencing digital\n\nassets, oil, metals, and more. Yet, due to regulatory uncertainty, not one of those contracts traded\n\non a U.S.-regulated exchange accessible to Americans. Instead, perpetual markets arose entirely\n\noffshore: foreign venues earned all the profit, foreign governments earned all the tax revenue, and\n\nforeign traders earned all the liquidity and risk management benefits.\n\n This year, the CFTC set out to resolve the uncertainty and bring perpetuals inside the U.S.\n\nregulatory perimeter. In May, the CFTC issued an Order allowing KalshiEX LLC (Kalshi) to list\n\na Bitcoin perpetual as a futures contract and confirming that any DCM can list a similar perpetual\n\nreferencing a digital asset without seeking prior approval. The CFTC also issued a Policy\n\nStatement advising DCMs to seek approval before listing perpetuals on other asset classes. These\n\nmeasured steps represent great progress for U.S. futures markets and American end users.\n\n CME now asks this Court to undo the progress that the CFTC has made. CME offers no\n\nbasis to establish that the CFTC has caused it any injury; on the contrary, the CFTC created a\n\nbusiness opportunity for CME by allowing it to offer a new product and compete for new market\n\nparticipants. CME is well within its rights to sit this one out. But it has no right to ask this Court\n\n\n\n\n 2\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 12 of 37\n\n\n\n\nto make the same choice for every other U.S. exchange.\n\n There is more at stake in this case than U.S. access to regulated perpetual futures. Once a\n\ntitan of innovation, CME now advances a novel theory of standing under which an incumbent\n\nexchange is injured whenever its regulator permits a new product that it chooses not to offer. If\n\nCME prevails, every product that the CFTC approves will invite litigation from incumbents who\n\nprefer the status quo, and the pace of progress in the U.S. futures markets will slow to a crawl.\n\nThe consequences would be disastrous. The CFTC is now working to bring other innovations\n\nonshore, including onchain markets that trade, clear, and settle on public blockchains, and each\n\nwould face the same challenge from any incumbent that declines to adopt it. U.S. leadership in\n\nglobal finance depends on the CFTC\u2019s ability to approve products without CME\u2019s permission.\n\n This brief addresses two defects in CME\u2019s suit. First, CME lacks Article III standing.\n\nCME relies on the doctrine of competitor standing to supply an injury in fact, but the doctrine\n\napplies only where government action intensifies competition in a fixed market so that injury to\n\nthe plaintiff follows as a matter of economic logic. The Order did nothing of the kind. It enlarged\n\nthe market rather than dividing it, opening DCMs to new market participants who would not have\n\ntraded in dated futures contracts. And it added no new competitors to the marketplace, because\n\nKalshi has been a DCM since 2020. Second, CME is an unsuitable challenger to the Order because\n\nits interests fall outside the zone of interests of the CEA provisions it invokes. The CEA\u2019s stated\n\npurposes include promoting responsible innovation and fair competition among exchanges, and its\n\nswap provisions were enacted to promote transparency and oversight of an otherwise opaque,\n\nlargely unregulated swaps market. CME\u2019s interest in stymying its rivals\u2019 innovation frustrates\n\neach of those statutory objectives.\n\n Therefore, the Court should grant the CFTC\u2019s motion to dismiss the complaint.\n\n\n\n\n 3\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 13 of 37\n\n\n\n\n ARGUMENT\n\nI. PERPETUALS BUILD ON LONGSTANDING ECONOMIC PRINCIPLES TO\n EXPAND ACCESS TO FUTURES MARKETS\n\n In the 1980s, economists theorized that futures contracts with no expiration date would\n\nhave significant benefits. Not only would they generally increase liquidity in futures markets, but\n\nthey would also expand futures markets to new classes of participants and assets. It was not until\n\nthe 2010s that foreign digital asset exchanges cracked the code to implement this theory. They\n\nbegan offering perpetuals, which have no expiration date but resemble traditional futures contracts\n\nin every other respect. Perpetuals build on centuries of futures-market innovation, adding a feature\n\nthat maintains the core functions of futures markets while expanding them to new frontiers.\n\n A. A Perpetual Is A Futures Contract That Allows Market Participants To Take\n A Position On The Price Of An Asset For An Indefinite Period Of Time\n\n Futures contracts are contracts that allow the parties to \u201cbuy\u201d or \u201csell\u201d economic exposure\n\nto an underlying asset, either by agreeing to \u201cbuy or sell\u201d the asset at \u201ca fixed date in the future\u201d\n\nor by agreeing to pay money when the price of the asset rises or falls. See CFTC v. Zelener, 373\n\nF.3d 861, 864 (7th Cir. 2004) (citation omitted). Futures contracts are traded through exchanges\n\nand are necessarily \u201cfungible,\u201d because \u201cthey have standard terms and each side\u2019s obligations are\n\nguaranteed by a clearing house.\u201d Id. The clearing house marks participants\u2019 positions to their\n\nmarket price each day\u2014by withdrawing or adding money to their accounts\u2014and issues margin\n\ncalls when participants\u2019 positions fall below a specified level. While it is theoretically possible to\n\nperform most futures contracts through \u201cdelivery of the commodity,\u201d the fungibility of futures\n\ncontracts allows participants to instead \u201ccancel their obligations by buying or selling offsetting\n\npositions.\u201d Id.\n\n The New York Mercantile Exchange\u2019s (NYMEX) crude oil futures market illustrates how\n\ntraditional futures markets and contracts work in practice. NYMEX offers the West Texas\n\n\n 4\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 14 of 37\n\n\n\n\nIntermediate (WTI) benchmark futures contract, which is a contract to buy or sell 1,000 barrels of\n\nWTI-grade oil during a specified future month. Crude Oil Futures \u2013 Contract Specs, CME Group,\n\nhttps://bit.ly/4gKmFhC. Because NYMEX allows margin trades, a trader need not pay the full\n\nvalue of a contract to buy or sell it; instead, the trader deposits a \u201cperformance bond\u201d above a\n\ncertain amount (the \u201cinitial margin\u201d) with its broker, which in turn posts margin with the clearing\n\nhouse. NYMEX Rulebook: Clearing House and Performance Bonds, CME Group,\n\nhttps://bit.ly/4r3kpoX. At the end of each day, the clearing house marks every position to that\n\nday\u2019s settlement price, and gains or losses are credited or debited from the party\u2019s account. See\n\nid. If the amount in his account drops below a certain threshold (the \u201cmaintenance margin\u201d), the\n\ntrader receives a \u201cmargin call\u201d that requires him to bring the amount back up to the initial margin.\n\nSee id. To exit the market, he can sell an equivalent contract at the current price. See id.\n\n The price of a contract sold on a traditional futures market like the NYMEX crude oil\n\nmarket accurately approximates the current price of the underlying asset because the contract\u2019s\n\nexpiration date creates an arbitrage opportunity if the two prices diverge. Take, for example, a\n\nNYMEX crude oil contract that requires the delivery of 1,000 barrels of oil on November 1. If the\n\ncurrent price of the futures contract is $80,000 and the current price of 1,000 barrels of oil (also\n\nknown as the \u201cspot\u201d or \u201ccash\u201d price) is $75,000, then a trader can agree today to sell 1,000 barrels\n\nfor $80,000 on November 1; immediately buy 1,000 barrels for $75,000; and then deliver those\n\nbarrels on November 1 for a $5,000 profit. Traders will exploit that opportunity until it disappears,\n\nselling the futures contract and buying oil until the two prices come back into line\u2014a process\n\nknown as \u201cconvergence.\u201d\n\n Perpetuals resemble traditional futures contracts in almost every respect. Like a traditional\n\nfutures contract, a perpetual is a standardized contract that tracks the price of an underlying asset\n\n\n\n\n 5\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 15 of 37\n\n\n\n\nand imposes payment obligations as the price rises or falls. See Songrun He et al., Fundamentals\n\nof Perpetual Futures at 1 (Dec. 2024), https://bit.ly/4yhSTqe. As the price rises, the buyer receives\n\nmoney; as it falls, the seller receives money. See id. Perpetuals have standardized terms and are\n\nentered through central limit order books. And as with traditional futures contracts, perpetuals are\n\nsubject to margin requirements. If the value of a party\u2019s collateral falls below a certain level\n\nbecause the price has moved against the party, the platform closes out the position, much as a\n\nbroker liquidates a traditional futures position when a margin call goes unmet. See id. Otherwise,\n\nparties close out their positions by buying offsetting perpetuals. See id.\n\n There are, however, two significant differences between traditional futures contracts and\n\nperpetuals. Most centrally, perpetuals do not have an expiration date, so parties can hold their\n\npositions indefinitely, as long as adequate margin is maintained. See He, supra at 1. The second\n\ndifference follows from the first. Because there is no expiration date, perpetuals use a different\n\nmechanism to ensure that the price of a perpetual tracks the price of the underlying asset. This\n\nmechanism is called the \u201cfunding rate,\u201d and it imposes a payment obligation on market participants\n\nwhose positions cause the price of the perpetual to diverge from the price of the asset. See He,\n\nsupra at 1-2. Specifically, exchanges periodically calculate a funding rate based on the difference\n\nbetween the prices of the perpetual and the reference asset, referencing reputable third-party\n\nsources to determine the latter. See id. at 7. If the price of a perpetual is greater than the price of\n\nthe asset, all buyers of the perpetual (the \u201clong\u201d side of the market) must make periodic payments\n\n(based on the funding rate) to sellers of the perpetual (the \u201cshort\u201d side of the market), and vice\n\nversa if the price of a perpetual is lower than the price of the asset. See id. at 2. These payments\n\nrun between the long and short sides of the market collectively, not between the parties to any\n\nparticular trade. The funding rate thus incentivizes participants to enter the market on whichever\n\n\n\n\n 6\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 16 of 37\n\n\n\n\nside will pull the perpetual\u2019s price back toward spot. And because the payments grow with the\n\ngap, the mechanism works like a rubber band, pulling harder the more the prices diverge.\n\n The market for WTI crude oil perpetuals on Hyperliquid illustrates how markets for\n\nperpetuals work. That market offers perpetuals that correspond to a single barrel of WTI-grade\n\ncrude oil. Specification Index, trade[XYZ], https://bit.ly/46fGib9 (last visited Sept. 7, 2026). A\n\nparty who wants to buy or sell a WTI perpetual must post collateral to open the position. For\n\ninstance, at 10x leverage (similar to the leverage available on NYMEX), a party can open a position\n\nin a perpetual priced at $80 by depositing at least $8. The platform then continuously adds to or\n\nsubtracts from the party\u2019s account\u2014for example, if a party buys a WTI perpetual for $80 and the\n\nprice rises to $81, the platform automatically adds $1 to the party\u2019s account. Id. The platform also\n\nenforces the funding rate every hour. As with traditional oil futures, a party can close his position\n\nby entering an offsetting position any time. Id.\n\n The upshot is that perpetuals both resemble traditional futures contracts and differ from\n\nthem in meaningful respects. That is no accident. For hundreds of years, U.S. futures market\n\noperators have continuously sought to innovate, offering new types of contracts that cover a\n\nbroader range of assets and generally are easier to trade. Perpetuals are a direct result of that\n\ninnovative process.\n\n B. Perpetuals Continue An Enduring Pattern Of Futures-Market Innovation\n\n In the modern economy, futures markets serve two primary functions. First, they enable\n\nmarket actors to \u201cmanag[e] and assum[e] price risks.\u201d 7 U.S.C. \u00a7 5(a). For example, an actor\n\nwhose business depends on cheap oil can hedge against the risk that oil prices will rise by buying\n\nan oil futures contract. See Mercatus Energy, The Fundamentals of Oil & Gas Hedging \u2013 Futures,\n\nhttps://perma.cc/PF3G-R63S. In turn, futures markets allow third-party speculators to assume that\n\nrisk in pursuit of profit.\n\n\n 7\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 17 of 37\n\n\n\n\n The second primary function of futures markets is \u201cdiscovering prices.\u201d 7 U.S.C. \u00a7 5(a).\n\nBecause the prices of futures contracts closely track the current prices of underlying assets, see\n\nsupra at 5, market actors often reference futures markets to determine the prices of an underlying\n\nasset, especially if there is no robust public market for the asset. See Hachmi Ben Ameur et al.,\n\nRevisiting the relationship between spot and futures markets: evidence from commodity markets\n\nand NARDL framework (July 27, 2021), https://bit.ly/468pbIe. Indeed, for most assets, it is\n\nsignificantly easier to trade a futures contract than to trade the asset itself. See Gregory J. Millman,\n\nFutures and Options Markets, The Concise Encyclopedia of Economics, https://bit.ly/4iRaHnz\n\n(last visited Sept. 7, 2026). That is true for physical commodities like oil, which are expensive to\n\ndeliver, and for intangible assets like stock indexes. See id. Accordingly, when real-world events\n\naffect the price of an asset, the futures markets usually reflect price changes first. See id.\n\n The history of futures markets is a history of relentless innovation to optimize these two\n\nfunctions and make them available to as many people as possible. The story, of course, starts with\n\ngrain. In the 1830s, the advent of railroads, canals, and grain elevators enabled a genuine national\n\ngrain market: farmers could sell to grain dealers, who could sell to regional merchants, who could\n\nsell to large-scale millers, who could process the grain and sell to wholesalers or end consumers.\n\nSee Joseph Santos, A History of Futures Trading in the United States, EH.Net Encyclopedia (Mar.\n\n16, 2008), https://bit.ly/3Sr3Uq9. But this supply chain was fragile, both because it required\n\nindividualized negotiations at every level and because it was hard to predict what prices\n\ndownstream buyers might be willing to pay. This price risk made it harder for the relevant actors\n\nto obtain the financing they needed to purchase grain in the first place and disincentivized them\n\nfrom investing to increase the scale of their operations. See id.\n\n To address these risks and enable parties to negotiate prices more easily, grain merchants\n\n\n\n\n 8\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 18 of 37\n\n\n\n\nand their financiers came up with two ideas that laid the groundwork for modern futures markets.\n\nThe first was the \u201cforward contract,\u201d which required the seller to deliver a specific amount of grain\n\nat a specific future time for a specific amount of money. See Alexander Belozertsev & Jerry W.\n\nMarkham, Commodity Exchanges and the Privatization of the Agricultural Sector in the\n\nCommonwealth of Independent States\u2014Needed Steps in Creating a Market Economy, 55 Law &\n\nContemp. Probs. 119, 135 (1992). These contracts, which could be entered into at every level of\n\nthe supply chain, protected parties against future price risk and allowed them to secure financing.\n\n The second idea was \u201ccommodity exchanges,\u201d which were regional marketplaces where\n\nbuyers and sellers could meet to negotiate prices for forward contracts. See Santos, supra.\n\nAlthough contracts still involved bespoke negotiations, these exchanges allowed for informal price\n\ndiscovery through the exchange of information about the contract prices. The exchanges also\n\nimposed grain standards to meet the high-volume grain trade\u2019s requirement that grains be fungible.\n\nSee id. The largest and most important exchange was the Board of Trade of the City of Chicago,\n\nwhich is now owned by CME.\n\n The emergence of forward contracts and commodity exchanges was a major development.\n\nBut those innovations did not enable a national market for managing and assuming price risk, nor\n\ndid they enable widespread price discovery. The main reason is that the bespoke contracts\n\nthemselves were not fungible. It was therefore difficult for a party to find another party who was\n\nwilling to take on its contractual obligations when the need arose. See Santos, supra.\n\n In the 1870s, however, the major Boards of Trade introduced several innovations that made\n\na common marketplace possible. To start, they required market participants to agree to certain\n\nstandardized contract terms, including delivery dates and unit amounts, rendering contracts\n\nfungible. See Belozertsev, supra at 135-36. Around the same time, the Boards of Trade also\n\n\n\n\n 9\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 19 of 37\n\n\n\n\nintroduced a rudimentary clearing house system that eliminated the need for market participants\n\nto deal directly with each other. See Santos, supra. This system depended on a network of brokers,\n\nwho served as the counterparties for every contract. See id. A market participant seeking to buy\n\ngrain would contract with a broker, who would find a participant who wanted to sell grain or\n\nanother broker who was working with a seller.\n\n Critically, the combination of fungible contracts and a basic clearing house system allowed\n\nmarket participants to settle their obligations by entering into an offsetting contract, rather than\n\nthrough physical delivery or receipt. The practice became so prevalent so quickly that at the\n\nChicago Board of Trade, \u201cnot less than three quarters of the transactions in the grain pit\u201d involved\n\n\u201cno physical handing over of any grain.\u201d Bd. of Trade of City of Chi. v. Christie Grain & Stock\n\nCo., 198 U.S. 236, 246-47 (1905). The result was a liquid, national market where participants\n\nfrom across the country gathered to buy and sell contracts \u201cexclusively for future delivery,\u201d i.e.,\n\nfutures contracts. Id. at 245. These early futures markets enabled nationwide price discovery\n\nbecause \u201cthe quotation of the prices continuously offered and accepted in [the markets] during\n\nbusiness hours [we]re collected . . . and handed to the telegraph companies,\u201d then widely\n\ndisseminated. Id.\n\n Throughout the twentieth century, futures markets expanded to allow the buying and\n\nselling of contracts for all kinds of assets. Thus, when Congress created the CFTC, it granted the\n\nCFTC the authority to regulate \u201ccontracts for future delivery\u201d of \u201call . . . goods and articles, except\n\nonions . . ., and all services, rights, and interests in which contracts for future delivery are presently\n\nor in the future dealt in.\u201d Commodity Futures Trading Commission Act of 1974, Pub. L. No. 93-\n\n463, 88 Stat. 1389, 1395.\n\n But in the 1970s, it became apparent that there needed to be a way to manage and assume\n\n\n\n\n 10\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 20 of 37\n\n\n\n\nprice risk for assets that were not amenable to traditional futures contracts. Most notably, the\n\nbreakdown of the Bretton Woods system and increasing inflation in the United States had led to\n\nvolatile interest rates. Leo Melamed, Evolution of the International Monetary Market, 8 Cato\n\nJournal 393, 395-96 (1988). As a result, there was significant demand for a financial instrument\n\nto hedge against the risk of further changes to interest rates. See id. But because traditional futures\n\ncontracts still required delivery of the underlying asset, they were not an option\u2014there was simply\n\nno way for one party to \u201cdeliver\u201d an interest rate to another.\n\n Accordingly, the next major futures-market innovation was a contract that did not require\n\nphysical delivery of the underlying asset: the \u201ccash settle[d]\u201d futures contract. See Melamed, supra\n\nat 402-03. Instead of requiring physical delivery of the asset at a certain price, cash-settled futures\n\ncontracts require one party to pay the other the difference between the price of the asset on the day\n\nof the contract and the price of the asset on a specified future date. For example, the first cash-\n\nsettled futures contract was the \u201cEurodollar futures contract,\u201d which referenced the interest rate on\n\na $1,000,000 deposit of U.S. dollars in European banks. See Market Begins Trading in Eurodollar\n\nFutures, N.Y. Times (Dec. 10, 1981), https://bit.ly/46fLuvE. If the interest rate on that deposit\n\nincreased in the specified time period, the \u201cseller\u201d would have to pay the \u201cbuyer\u201d an amount\n\ndetermined by a preset formula; if the interest rate went down, the buyer would have to pay the\n\nseller. Id. Critically, the contract required the parties to agree to a specified \u201creference\u201d price to\n\ndetermine the relevant interest rates. For Eurodollar futures contracts, the parties would reference\n\nthe London Interbank Offered Rate (LIBOR). Id.\n\n Today, cash-settled futures contracts are some of the most widely traded contracts in the\n\nglobal futures markets. The most prominent are futures contracts for stock indexes, which require\n\nthe parties to exchange payments based on the value of a specific stock index. See Index Futures,\n\n\n\n\n 11\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 21 of 37\n\n\n\n\nScienceDirect, https://bit.ly/4xFNARy (last visited Sept. 2, 2026). These contracts allow parties\n\nto hedge against the risk that a broad swath of stocks will rise or fall and provide the broader\n\nmarket with valuable information about the price of those stocks.\n\n Almost immediately after cash-settled futures contracts debuted, finance professors and\n\neconomists began to theorize the next step in the evolution of futures contracts\u2014contracts with no\n\nexpiration dates. The motivation was twofold. First, expiration dates imposed significant\n\ntransaction costs on parties who wanted to take long-term positions on the price of underlying\n\nassets, including to hedge against long-term price risk. See Adam K. Gehr, Jr., Undated Futures\n\nMarkets, 8 Journal of Futures Markets 89, 91-92 (1988); Anthony Neuberger, Using Futures\n\nContracts for Corporate Hedging: The Problem of Expiry and a Possible Solution, 2 European\n\nFin. Mgmt. 263 (1996). Although most futures markets allow participants to \u201croll over\u201d their dated\n\ncontracts, doing so requires participants to pay additional fees and introduces timing and basis risk.\n\nSecond, expiration dates limit futures contracts to assets for which there is a readily available\n\nreference price. And for certain assets, such a price may rarely be available. See Robert Shiller,\n\nMeasuring Asset Values for Cash Settlement in Derivatives Markets: Hedonic Repeated Measures\n\nIndices and Perpetual Futures, NBER Technical Working Paper #131, 1-2 (Dec. 1992).\n\n The removal of expiration dates theoretically presented a solution for both issues. If futures\n\ncontracts never expired, parties seeking long-term exposure would not need to roll over their\n\ncontracts. See Gehr, supra at 89-90. Moreover, there would be no need to settle the futures\n\ncontracts based on an unobservable reference price. See Shiller, supra at 2-3. Instead, the parties\n\ncould simply trade the futures contracts using any observable information about the value of the\n\nasset. Id. And the market operator would continuously settle the parties\u2019 positions.\n\n But there was a significant barrier to implementing futures contracts without an expiration\n\n\n\n\n 12\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 22 of 37\n\n\n\n\ndate\u2014at least for assets that can be quickly purchased and sold on an underlying market. For such\n\nassets, the expiration date plays an important role: it keeps the price of the futures contract close\n\nto the price of the asset and thereby prevents traders from exploiting differences between the two\n\nprices. See supra at 5. Accordingly, futures markets cannot eliminate expiration dates for futures\n\ncontracts involving such assets unless there is an alternative mechanism to ensure that the price of\n\nthe futures contract and the price of the asset converge.\n\n After more than two decades, futures-market innovators developed a mechanism that\n\nallows participants to trade futures contracts without an expiration date, i.e., perpetuals. And this\n\ntime, the innovation came from the markets for digital asset futures. In 2016, the Bitcoin\n\nMercantile Exchange (BitMEX) debuted a perpetual futures contract that featured a funding-rate\n\nmechanism. See He, supra at 8. In short, the contract allowed participants to take a position on\n\nthe price of Bitcoin. And the funding-rate mechanism ensured that the price of the contract would\n\napproximate the price of Bitcoin. See id. at 9-10. Specifically, the platform would compare the\n\nprice of the contract to the price of Bitcoin\u2014as determined by a specified benchmark\u2014every eight\n\nhours. See id. If the price of the contract was above the price of Bitcoin, buyers would pay a fee\n\nto the sellers; if the price of the contract was below the price of Bitcoin, sellers would pay a fee to\n\nbuyers. See id. Beyond that, the contract operated like any other futures contract. Today, almost\n\nall markets for perpetuals rely on that funding-rate mechanism.\n\n In sum, perpetuals are the latest in a long line of innovations to manage risk and discover\n\nprices. There is nothing foreign or unusual about them: They instead build on longstanding market\n\nprinciples to increase liquidity in futures markets and provide opportunities to new participants.\n\n The development of the perpetual also provides a window into continuing innovation in\n\nmarket infrastructure. As noted, perpetuals emerged on BitMEX, which was a privately owned\n\n\n\n\n 13\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 23 of 37\n\n\n\n\nand operated digital asset exchange. See John Paul Hampstead, BitMEX CEO: what a trader\n\nwants, what a trader needs (July 23, 2018), https://bit.ly/4x9UZri. But the expansion of perpetuals\n\nbeyond digital assets into commodities and equities has unfolded largely on public blockchains\n\nlike Hyperliquid, where trading, margining, and settlement occur on a public ledger rather than on\n\nthe proprietary back-end systems of an exchange or clearing house. On that infrastructure, every\n\norder and position is publicly visible; margin and collateral are adjusted continuously; and every\n\ntrade is written to a permanent, independently verifiable record. See Hyperliquid Policy Center,\n\nStatement in Connection with the Meeting of the Innovation Advisory Committee at 6 (Aug. 27,\n\n2026), https://bit.ly/4cvS1G2.\n\n Those properties\u2014transparency, continuous risk management, and a complete audit trail\u2014\n\nare ones that regulators have long sought from market infrastructure. Each generation of\n\ntechnology\u2014from the telegraph to the electronic matching engine\u2014has moved the markets closer\n\nto those objectives, leaving them more transparent and more efficient. Onchain perpetual markets\n\nare the innovation of this generation, and they sit comfortably within that tradition.\n\n C. Perpetuals Increase Trading Volume And Attract New Traders To Futures\n Markets\n\n Like previous futures-market innovations, perpetuals decrease transaction costs and\n\nincrease the options available to market participants. Four features of perpetuals are particularly\n\nimportant. First, as discussed, parties who wish to maintain a long-term hedge against future price\n\nrisks can do so without rolling over their contracts. See Hyperliquid Policy Center, Comment RE\n\nJoint Request for Comment on Further Definition of \u201cSwap\u201d and \u201cSecurity-Based Swap\u201d and on\n\nAlternative Compliance at 5 (Aug. 24, 2026), https://perma.cc/QV2X-KF3W. Previously, a party\n\nwho wanted to maintain a one-year exposure had to so through monthly dated contracts, which\n\nrequired executing twelve rollovers per year and incurring significant costs as a result. Perpetuals\n\n\n\n 14\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 24 of 37\n\n\n\n\navoid those costs entirely. Id.\n\n Second, perpetuals come in accessible contract sizes. In traditional futures markets,\n\ncontracts for physical commodities require large unit sizes because of the substantial costs\n\nassociated with physical delivery. See Hyperliquid Policy Center, Comment RE Joint Request for\n\nComment, supra at 4-5. For example, transporting a single barrel of oil is not much easier than\n\ntransporting 100 barrels of oil, so only the latter makes economic sense. By contrast, there is no\n\nrisk that a party who wants to buy or sell a perpetual will be forced to receive or deliver the\n\nunderlying asset\u2014freeing the market to offer smaller contract sizes without concern for the\n\ndisproportionate delivery costs. See id.\n\n Third, perpetuals concentrate liquidity in a single contract for every reference asset. See\n\nHyperliquid Policy Center, Comment RE Joint Request for Comment, supra at 4. This differs from\n\ntraditional futures markets, which offer multiple date and quantity options for the same reference\n\nasset. For instance, a party seeking to buy or sell oil futures on NYMEX can choose between a\n\n1,000-barrel and 100-barrel contract, plus different contract expirations for both. Crude Oil\n\nFutures \u2013 Contract Specs, CME Group, https://perma.cc/547V-H7LF. These options create\n\nmultiple fragmented markets for the same reference asset, spreading trading activity across those\n\nmarkets. By contrast, because there is only one perpetual for every reference asset, liquidity is\n\nconcentrated in the market for that contract.\n\n Fourth, perpetuals simplify position management. See Hyperliquid Policy Center,\n\nComment RE Joint Request for Comment, supra at 5. A party need not select a time frame when\n\nentering the position and need not monitor expiration over the life of the position.\n\n The combination of these features has led to an explosion in trading volume. In 2025,\n\nmarkets on Hyperliquid alone accounted for nearly $3 trillion in notional trading volume. See\n\n\n\n\n 15\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 25 of 37\n\n\n\n\nHyperliquid Policy Center, Comment RE Joint Request for Comment, supra at 5. Overall, offshore\n\nmarkets for perpetuals grew to nearly $90 trillion in volume last year. See Anastasia Chernikova,\n\nHow Perpetual Futures Could Make More Assets Tradable, Forbes (Aug. 27, 2026),\n\nhttps://perma.cc/WDV3-C5AS. Recent studies show that much of this volume comes from\n\nparticipants who would never have traded in traditional futures markets, including because of high\n\nfees and barriers to entry, as well as a lack of products suited to how they manage and assume risk.\n\nSee Hyperliquid Policy Center, Perpetual futures as complements to dated futures (Aug. 21, 2026),\n\nhttps://perma.cc/943R-EJNW.\n\nII. CME HAS NOT ADEQUATELY ALLEGED THAT IT HAS SUFFERED AN\n INJURY IN FACT\n\n CME alleges standing under a theory of competitor standing, claiming that the CFTC Order\n\nauthorizes Kalshi (as well as any other DCM that self-certifies similar digital asset perpetuals) to\n\nlist perpetuals that will compete with CME\u2019s existing products. Compl. \u00b6 10. But as the CFTC\n\npoints out, its Order is unlike any agency action in cases where the D.C. Circuit has found\n\ncompetitor standing, because the Order expands the market in which CME competes by inviting\n\nthose who trade perpetuals into the U.S. derivatives markets for the first time. CFTC Mot. 14, 18.\n\nIn this circumstance, where government action grows the pie rather than intensifying competition\n\nfor the same pie, the logic of the competitor standing doctrine does not apply.\n\n A. Competitor Standing Requires Demonstrating That The Challenged Agency\n Action Intensifies Competition, Thereby Injuring The Plaintiff As A Matter\n Of Economic Logic\n\n When the plaintiff challenging government action is not itself the object of the action,\n\n\u201cstanding is not precluded, but it is ordinarily \u2018substantially more difficult\u2019 to establish.\u201d Lujan v.\n\nDefenders of Wildlife, 504 U.S. 555, 562 (1992) (citation omitted). The competitor-injury doctrine\n\nis one such way to establish the injury-in-fact requirement. It does not alter the plaintiff\u2019s burden\n\n\n\n 16\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 26 of 37\n\n\n\n\nto demonstrate an \u201cimminently threatened . . . concrete and particularized \u2018injury in fact . . . .\u2019\u201d\n\nLexmark Int\u2019l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 125 (2014). Rather, the\n\ndoctrine applies basic economic principles to \u201csuppl[y] the link between increased competition\n\nand tangible injury,\u201d permitting plaintiffs to establish standing by showing \u201cthat the challenged\n\ngovernment action results in \u2018an actual or imminent increase in competition,\u2019 . . . thereby injuring\n\ncompetitors \u2018as a matter of economic logic.\u2019\u201d Air Excursions LLC v. Yellen, 66 F.4th 272, 279-81\n\n(D.C. Cir. 2023) (citations omitted).\n\n At the root of the doctrine is the principle that, in a fixed market, \u201cone direct competitor\u2019s\n\ngain of market share is another\u2019s loss.\u201d Castro v. Scanlan, 86 F.4th 947, 954 (1st Cir. 2023).\n\nCourts therefore presume that a plaintiff suffers an injury in fact when government action\n\nintensifies competition for a \u201cshare in a fixed amount of money\u201d or market, Sherley v. Sebelius,\n\n610 F.3d 69, 74 (D.C. Cir. 2010), because the action \u201calmost surely injures a seller in one form or\n\nanother,\u201d such as by forcing it to lower prices or expend more resources to maintain the same\n\nmarket share, id. at 72. Competitor standing therefore \u201csimply acknowledge[s] a chain of\n\ncausation \u2018firmly rooted in the basic law of economics\u2019\u201d\u2014that when governmental action\n\n\u201cprovides benefits to an existing competitor or expands the number of entrants in the [plaintiff\u2019s]\n\nmarket,\u201d the plaintiff is almost certainly harmed. New World Radio, Inc. v. FCC, 294 F.3d 164,\n\n172 (D.C. Cir. 2002).\n\n The D.C. Circuit has held that plaintiffs have competitor standing when government action\n\ngives the plaintiffs\u2019 rivals a competitive edge, such as a credential that allows a rival to \u201cmore\n\neffectively compete with and take business away from\u201d the plaintiff, see Am. Inst. of Certified Pub.\n\nAccts. v. IRS, 804 F.3d 1193, 1197 (D.C. Cir. 2015); that advantages a politician\u2019s rivals in an\n\nelection, see Shays v. FEC, 414 F.3d 76, 85-86 (D.C. Cir. 2005); or that reimburses a firm\u2019s rival\n\n\n\n\n 17\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 27 of 37\n\n\n\n\nfor selling its product at a discounted rate, see U.S. Telecom Ass\u2019n v. FCC, 295 F.3d 1326, 1331\n\n(D.C. Cir. 2002). In all of these cases, the plaintiffs\u2019 rivals received a competitive benefit from\n\nthe government while the markets in which the rivals competed (for tax preparation service\n\ncustomers, voters, and telecommunications customers, respectively) remained fixed.\n\n Even more frequently, the D.C. Circuit has upheld competitor standing where a\n\ngovernment action \u201callows new entrants into a fixed regulated market.\u201d Air Excursions, 66 F.4th\n\nat 280. In those cases, the government action increases supply in a market with unchanged\n\ndemand, thereby intensifying competition among suppliers. See, e.g., Int\u2019l Union of Bricklayers\n\n& Allied Craftsmen v. Meese, 761 F.2d 798, 802 (D.C. Cir. 1985) (union had standing where\n\ngovernment action \u201callow[ed] aliens into the country to perform work\u201d otherwise belonging to\n\nunion members); MD Pharm., Inc. v. DEA, 133 F.3d 8, 12-13 (D.C. Cir. 1998) (drug manufacturer\n\nhad standing to challenge new entrant to drug market); Sherley, 610 F.3d at 74 (researchers had\n\nstanding to challenge action that increased grant applications without increasing research funding);\n\nMendoza v. Perez, 754 F.3d 1002, 1011 (D.C. Cir. 2014) (laborers had standing to challenge rules\n\nleading to increased supply of labor).\n\n But \u201cbasic laws of economics\u201d are not a one-way ratchet in favor of competitor standing.\n\nUnited Transp. Union v. I.C.C., 891 F.2d 908, 912 n.7 (D.C. Cir. 1989). When agency action\n\nbenefits a market actor but does not intensify competition, the actor\u2019s competitors lack standing.\n\nFor this reason, an agency action that awards a \u201cwindfall\u201d to a rival \u201cfalls short of establishing that\n\n\u2018any specific harm\u2019 will result \u2018as a matter of economic logic,\u2019\u201d and so does not support a theory\n\nof competitor standing. Air Excursions, 66 F.4th at 280 (citation omitted). Similarly, plaintiffs\n\nlack competitor standing when they are not \u201cdirect and current competitor[s] whose bottom line[s]\n\nmay be adversely affected by the challenged agency action.\u201d KERM, Inc. v. FCC, 353 F.3d 57, 60\n\n\n\n\n 18\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 28 of 37\n\n\n\n\n(D.C. Cir. 2004) (quoting New World Radio, 294 F.3d at 170). See Save Jobs USA v. DHS, 942\n\nF.3d 504, 510 (D.C. Cir. 2019). And although the D.C. Circuit has never confronted such a case,\n\nthe same result logically should follow where the government action grows the market in which\n\nthe plaintiff competes, rather than intensifying competition for the same market share.\n\n B. The CFTC\u2019s Order Did Not Intensify Competition And Thereby Injure CME\n As A Matter Of Economic Logic\n\n This case stands apart from the mine run of decisions applying the competitor standing\n\ndoctrine. Rather than giving certain rivals a competitive edge in a fixed market, the CFTC Order\n\nalters the market itself, growing the potential market participant base for all DCMs, including CME\n\nand Kalshi. Before the CFTC Order, market participants who transacted in perpetuals were a\n\nmassive and entirely untapped customer base for U.S.-regulated exchanges. See supra at 15-16.\n\n Many participants who trade in perpetuals would not otherwise trade in dated futures for\n\nat least two reasons. First, some perpetual futures traders may lack the access or sophistication to\n\ntrade in dated futures. See Hyperliquid Policy Center, Perpetual futures as complements to dated\n\nfutures, supra at 2, 20. Second, dated futures do not meet the risk transfer needs of certain hedgers.\n\nSee id. at 22. Consider, for example, a payments processor that must continuously hold Bitcoin\n\nbecause it accepts Bitcoin from customers and pays merchants in dollars. Hedging the risk of its\n\nBitcoin holdings with dated futures would force the processor to close its expiring position and\n\nopen a new one month after month, paying transaction costs on each trade and risking unfavorable\n\nprices at each replacement. For this type of market participant, perpetuals may be the only\n\nattractive product to hedge its risk.\n\n The CFTC Order therefore expands choices available to all hedgers, opening the U.S.\n\nderivatives markets\u2014whether on Kalshi, CME, or other DCMs\u2014to market participants whose\n\nrisks and profiles were never well-matched to dated contracts. The Order invites those traders\u2019\n\n\n\n 19\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 29 of 37\n\n\n\n\ndollars into the U.S. futures markets, creating an expanded market from which all DCMs stand to\n\nbenefit. Indeed, nowhere in CME\u2019s complaint does it disclaim that the exchange intends to list\n\nperpetuals too. In this context, it does not follow as a matter of \u201ceconomic logic\u201d that CME will\n\nnecessarily face intensified competition that causes a \u201cdetriment [to] its bottom line.\u201d Sherley, 610\n\nF.3d at 72. Instead, the availability of the new product line of perpetual futures may financially\n\nbenefit all DCMs\u2014CME included. See CFTC Mot. 17-18.\n\n Nor does the CFTC Order \u201callow[] new entrants into a fixed regulated market,\u201d thereby\n\nincreasing supply-side competition. Air Excursions, 66 F.4th at 280. In many D.C. Circuit cases\n\nfinding competitor standing, the government action introduced entirely new competitors into a\n\nregulated market, such as new laborers competing for work or researchers competing for\n\ngovernment funding. See Meese, 761 F.2d at 802; Sherley, 610 F.3d at 74. Not so here. Contrary\n\nto CME\u2019s conclusory allegations, Kalshi is not a new market entrant. Cf. Compl. \u00b6\u00b6 62, 65. Kalshi\n\nhas operated as a DCM since November 2020, and it has long competed in the same walled garden\n\nas CME and other derivatives exchanges. See Order of Designation, In the Matter of the\n\nApplication of KalshiEX LLC for Designation as a Contract Market (Nov. 3, 2020). That Kalshi\n\nnow offers a new product line does not make it a newcomer to the derivatives market.\n\n In sum, because the CFTC Order simply approved a new product available to be listed on\n\nall DCMs, and without increasing the supply of rivals, CME lacks competitor standing to challenge\n\nthe Order. CME\u2019s allegations that it perceives perpetuals as a competitive threat to its products,\n\nsee Compl. \u00b6\u00b6 45-52, do not suffice to allege that the CFTC Order intensified competition in a\n\nfixed market such that CME will necessarily be injured as a matter of economic logic.\n\nIII. CME IS AN UNSUITABLE CHALLENGER TO THE CFTC ORDER\n\n Even if CME had standing, its challenge fails on the merits because its asserted interest in\n\nburdening its rivals with more onerous regulations does not fall within the zone of interests\n\n\n 20\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 30 of 37\n\n\n\n\nprotected by the Commodity Exchange Act. As the CFTC explains, Congress amended the Act to\n\nclassify and regulate swaps in the wake of the 2008 financial crisis to bring transparency and\n\noversight to the over-the-counter swap market\u2014a policy that also led to more competitive pricing.\n\nSee CFTC Mot. 23-24. CME\u2019s asserted interest in diminishing competition from its rivals is\n\nfundamentally misaligned with the Act\u2019s design.\n\n A. Plaintiffs Must Assert Interests Within The Zone Of Interests Protected By\n The Invoked Statute\n\n To qualify as an \u201cadversely affected or aggrieved\u201d person entitled to judicial review under\n\nthe Administrative Procedure Act, 5 U.S.C. \u00a7 702, \u201ca plaintiff must establish that the injury he\n\ncomplains of . . . falls within the \u2018zone of interests\u2019 sought to be protected by the statutory\n\nprovision whose violation forms the legal basis for his complaint.\u201d Amgen v. Smith, 357 F.3d 103,\n\n108 (D.C. Cir. 2004) (quoting Lujan v. Nat\u2019l Wildlife Fed., 497 U.S. 871, 883 (1990)). This zone\n\nof interests test, which courts previously framed as a question of prudential standing, limits the\n\ntypes of parties that \u201cmay invoke the cause of action\u201d providing the basis for the lawsuit. Lexmark,\n\n572 U.S. at 130. A plaintiff fails this test when its interests are \u201cso marginally related to or\n\ninconsistent with the purposes implicit in the statute that it cannot reasonably be assumed that\n\nCongress intended to permit the suit.\u201d Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians\n\nv. Patchak, 567 U.S. 209, 225 (2012) (citation omitted).\n\n Plaintiffs must satisfy one of two criteria to fall within a statute\u2019s protected zone. First, \u201ca\n\nparty is within that zone if it is among those whom Congress expressly or directly indicated were\n\nthe intended beneficiaries of a statute.\u201d Hazardous Waste Treatment Council v. Thomas (HWTC),\n\n885 F.2d 918, 922 (D.C. Cir. 1989). For example, a business that relies on aliens classified by\n\nstatute as B-1 business visitors is an intended beneficiary of that statutory classification, which is\n\n\u201cdesigned to protect . . . American businesses benefitting from transactions with B-1 business\n\n\n\n 21\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 31 of 37\n\n\n\n\nvisitors.\u201d CSL Plasma Inc. v. U.S. Customs & Border Prot., 33 F.4th 584, 590 (D.C. Cir. 2022).\n\nSecond, even if a plaintiff\u2019s interests are \u201cnot in any specific or obvious sense among those\n\nCongress intended to protect,\u201d HWTC, 885 F.2d at 922, the plaintiff is a \u201csuitable challenger[]\u201d if\n\nits \u201cinterests coincide \u2018systemically, not fortuitously\u2019 with those of intended beneficiaries,\u201d Twin\n\nRivers Paper Co. v. SEC, 934 F.3d 607, 616 (D.C. Cir. 2019) (quoting HWTC, 885 F.2d at 922-\n\n24). At bottom, the zone of interests test requires plaintiffs to be \u201creasonable\u2014indeed,\n\npredictable\u2014challengers of the [agency\u2019s] decisions.\u201d Match-E, 567 U.S. at 227.\n\n When a plaintiff asserts a competitive injury, that interest satisfies the zone of interests test\n\nif the relevant statute imposes market-entry or other competitive restrictions that \u201creflect[] a\n\ncongressional judgment that the constraint on competition is the means to secure the statutory\n\nend.\u201d First Nat\u2019l Bank & Trust Co. v. Nat\u2019l Credit Union Admin., 988 F.2d 1272, 1278 (D.C. Cir.\n\n1993). In other words, where Congress seeks to protect consumers by limiting how economic\n\nactors compete, competitors\u2019 interests \u201cin patrolling a statutory picket line\u201d align with the interests\n\nprotected by the statute, and competitors may sue to enforce those statutory provisions. Id. The\n\nD.C. Circuit has repeatedly applied this rule to hold that plaintiffs suing to bar their rivals from\n\nmarkets under \u201centry-restricting statute[s]\u201d fall within the statutes\u2019 zones of interests because their\n\n\u201cinterests \u2018are generally congruent with a statutory purpose to restrict entry.\u2019\u201d MD Pharm., 133\n\nF.3d at 13 (citation omitted); see also Mova Pharm. Corp. v. Shalala, 140 F.3d 1060, 1076 (D.C.\n\nCir. 1998) (holding that the plaintiff\u2019s \u201cinterest in limiting competition . . . is, \u2018by its very\n\nnature,\u2019 . . . linked with the statute\u2019s goal of limiting competition between generic manufacturers\u201d).\n\n The Supreme Court has applied this rule in a series of decisions permitting economic actors\n\nto challenge agency actions relaxing statutory restrictions on the activities of national banks. See\n\nClarke v. Sec. Indus. Ass\u2019n, 479 U.S. 388, 403 (1987); Invest. Co. Inst. v. Camp, 401 U.S. 617,\n\n\n\n\n 22\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 32 of 37\n\n\n\n\n620-21 (1971); Arnold Tours, Inc. v. Camp, 400 U.S. 45, 46 (1970); Ass\u2019n of Data Processing\n\nServ. Orgs. v. Camp, 397 U.S. 150, 156-57 (1970); see also Nat\u2019l Credit Union Admin. v. First\n\nNat\u2019l Bank & Trust Co., 522 U.S. 479, 492-93 (1998) (similar analysis in context of statutory\n\n\u201cinterest in limiting the markets that federal credit unions can serve\u201d). In these decisions, the\n\nstatutes at issue restricted national banks from entering certain lines of business, see, e.g., Invest.\n\nCo Inst.., 401 U.S. at 620-21 (securities); Arnold Tours, 400 U.S. at 46 (travel services); Ass\u2019n of\n\nData Processing Serv. Orgs., 397 U.S. at 154-56 (data processing), or geographic markets, see\n\nClarke, 479 U.S. at 403 (preventing national banks from \u201cgaining a monopoly control over credit\n\nand money through unlimited branching\u201d). Because the statutes \u201carguably legislated against the\n\ncompetition that [the plaintiffs sought] to challenge,\u201d the plaintiffs\u2019 competitive injuries fell within\n\nthe scope of the statutes. Clarke, 479 U.S. at 403 (quoting Invest. Co. Inst., 401 U.S. at 620);\n\naccord Hardin v. Ky. Utils. Co., 390 U.S. 1, 6 (1968). But where the plaintiffs\u2019 interests do not\n\nalign \u201csystematically\u201d with those the invoked statutes protect, courts have found that competitors\n\ndo not fall within the zone of interests of the statute. See, e.g., HWTC, 885 F.2d at 924; Liquid\n\nCarbonic Indus. Corp. v. FERC, 29 F.3d 697, 704-06 (D.C. Cir. 1994); Cement Kiln Recycling\n\nCoal. v. EPA, 255 F.3d 855, 870-71 (D.C. Cir. 2001).\n\n B. CME\u2019s Asserted Competitive Interest Does Not Fall Within The Zone Of\n Interests Protected By The Commodity Exchange Act\u2019s Swap Provisions\n\n CME\u2019s claimed competitive interest in increasing the regulatory burdens on its rivals does\n\nnot fall within the zone of interests of the \u201csubstantive provision[]\u201d upon which the \u201cgravamen\u201d\n\nof its complaint focuses, which is the CEA\u2019s classification of \u201cswaps\u201d in 7 U.S.C. \u00a7 1a(47). See\n\nCSL Plasma Inc., 33 F.4th at 589 (citation omitted); Compl. \u00b6\u00b6 189-202. The CEA\u2019s classification\n\nof swaps does not operate by \u201climiting competition,\u201d Mova Pharm. Corp., 140 F.3d at 1076, or\n\n\u201crestrict[ing] entry into\u201d the derivatives marketplace, MD Pharm., 133 F.3d at 12-13.\n\n\n\n 23\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 33 of 37\n\n\n\n\n Congress first amended the CEA to define and regulate swaps in the wake of the 2008\n\nfinancial crisis, which was exacerbated in part by the lack of transparency in the unregulated, over-\n\nthe-counter derivatives market, including swaps. See Invest. Co. Inst. v. CFTC, 891 F. Supp. 2d\n\n162, 172 (D.D.C. 2012). As part of the Dodd-Frank Wall Street Reform and Consumer Protection\n\nAct, Congress sought to protect taxpayers against future bailouts by creating a regulatory scheme\n\nrequiring many swaps to be traded on regulated exchanges and swap dealers to be subject to\n\ncapital, margin, and reporting requirements. See Pub. L. No. 111\u2013203, 124 Stat. 1376, 1641\n\n(2010). This regulatory sea change aimed to bring \u201ctransparency\u201d to the swap markets, putting\n\nthem on par with exchange-traded futures and securities, and to thereby facilitate meaningful\n\noversight. In re Interest Rate Swaps Antitrust Litig., 261 F. Supp. 3d 430, 445 (S.D.N.Y. 2017).\n\n Far from evincing a congressional intent to somehow restrain competition, the Dodd-Frank\n\namendments to the CEA improved price competition in the swap markets, because the prior\n\n\u201crelative opaqueness of the [over-the-counter] market\u201d had resulted in less competitive price\n\nsetting. See S. Rep. 111-176, 111th Cong., 2d Sess. at 34 (2010). In this way, Dodd-Frank\u2019s\n\nenactment of the swap classification and regulatory regime aligns with one of the CEA\u2019s core\n\nexpress purposes, which is to \u201cpromote responsible innovation and fair competition among boards\n\nof trade, other markets and market participants.\u201d 7 U.S.C. \u00a7 5(b).\n\n CME\u2019s stated interest\u2014in \u201cforc[ing] [perpetuals] off the marketplace as futures,\u201d Compl.\n\n\u00b6 68\u2014is at cross-purposes with Dodd-Frank and the CEA, making CME\u2019s suit \u201cmore likely to\n\nfrustrate than to further statutory objectives,\u201d Twin Rivers Paper Co., 934 F.3d at 616. By defining\n\nand regulating swaps, Dodd-Frank\u2019s primary intervention was to require \u201call cleared swaps to be\n\ntraded like futures,\u201d bringing transparency and regulatory oversight to the previously unregulated\n\nswap markets. Bloomberg L.P. v. CFTC, 949 F. Supp. 2d 91, 98 (D.D.C. 2013). The CFTC Order\n\n\n\n\n 24\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 34 of 37\n\n\n\n\nachieves a similar result for perpetuals, treating the products not just like futures but as futures.\n\nCME\u2019s attempt to reclassify the products as swaps would result in no corresponding improvement\n\nin the transparency and oversight of perpetual futures markets.\n\n Moreover, CME\u2019s competitive interests are not congruent with any statutory design to\n\n\u201cconstrain[] competition [a]s the means to secure the statutory end.\u201d First Nat\u2019l Bank & Trust Co.,\n\n988 F.2d at 1278. Contrast the interests protected by the CEA\u2019s classification of swaps with those\n\nprotected by the statutes in Investment Company Institute, Arnold Tours, and Association of Data\n\nProcessing Service Organizations. See supra at 22-23. In all of those cases, Congress created a\n\n\u201cstatutory demarcation\u201d dividing two industries\u2014national banks on the one hand, and data\n\nprocessing, travel services, and securities, on the other\u2014such that the latter groups were \u201csuitable\n\nchallenger[s]\u201d to enforce the line of demarcation when national banks infringed on their turf. First\n\nNat\u2019l Bank & Trust Co., 988 F.2d at 1277-78. But here, the regulatory distinction between futures\n\nand swaps does not involve the same type of restraint on competition because DCMs are permitted\n\nto list futures and swaps. See 7 U.S.C. \u00a7 7b-3(a). Nor does the statute seek to restrict the growth\n\nof a particular industry (like the statutes in Clarke and First Nat\u2019l Bank & Trust Co.), or to\n\nexplicitly shield a party from competition (like the statute in Mova Pharmaceuticals).\n\n At bottom, CME\u2019s interest in burdening its rivals with the categorization of perpetuals as\n\nswaps reveals a \u201csystematic misalignment with\u201d the interests of taxpayers, whom the Commodity\n\nExchange Act seeks to protect by ensuring that the derivatives markets are transparent,\n\ncompetitive, and subject to U.S. regulatory oversight. Twin Rivers Paper Co., 934 F.3d at 618.\n\n CONCLUSION\n\n The Court should dismiss CME\u2019s complaint for lack of standing or, in the alternative,\n\nfailure to state a claim for relief.\n\n\n\n\n 25\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 35 of 37\n\n\n\n\nDated: September 9, 2026 Respectfully submitted,\n\n /s/ Elizabeth B. Prelogar\n Elizabeth B. Prelogar (D.C. Bar No. 1011890)\n Counsel of Record\n Elias S. Kim (D.C. Bar No. 1673678) (pro hac vice\n application pending)\n Claire Groden (D.C. Bar No. 1738682)\n COOLEY LLP\n 1299 Pennsylvania Avenue NW, Suite 700\n Washington, DC 20004\n (202) 842-7800\n eprelogar@cooley.com\n\n Counsel for Amicus Curiae Hyperliquid Policy\n Center\n\n\n\n\n 26\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 36 of 37\n\n\n\n\n CERTIFICATE OF COMPLIANCE\n\n This brief complies with all the applicable requirements set forth in Local Civil Rule 7(o),\n\nincluding all formatting requirements, and does not exceed 25 pages in length.\n\n\n\n Dated: September 9, 2026 /s/ Elizabeth B. Prelogar\n Elizabeth B. Prelogar\n\n Counsel for Amicus Curiae Hyperliquid\n Policy Center\n\n\n\n\n 27\n\f Case 1:26-cv-02157-CKK Document 36-1 Filed 09/09/26 Page 37 of 37\n\n\n\n\n CERTIFICATE OF SERVICE\n\n I certify that on this 9th day of September, 2026, I electronically filed the foregoing with\n\nthe United States District Court for the District of Columbia using the Court\u2019s CM/ECF system,\n\nwhich will effect service upon all registered parties.\n\n\n\n Dated: September 9, 2026 /s/ Elizabeth B. Prelogar\n Elizabeth B. Prelogar\n\n Counsel for Amicus Curiae Hyperliquid\n Policy Center\n\n\n\n\n 28\n\f","ocr_status":2,"date_upload":"2026-09-09T05:13:13.066836-07:00","document_number":"36","attachment_number":1,"pacer_doc_id":"045012330694","is_available":true,"is_free_on_pacer":null,"is_sealed":false,"document_type":2,"description":"Exhibit Proposed Amicus Brief","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/492912800/","id":492912800,"tags":[],"absolute_url":"/docket/73500937/36/2/chicago-mercantile-exchange-inc-v-selig/","date_created":"2026-09-09T04:44:40.932318-07:00","date_modified":"2026-09-09T07:42:48.312267-07:00","sha1":"","page_count":1,"file_size":117959,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"36","attachment_number":2,"pacer_doc_id":"045012330695","is_available":false,"is_free_on_pacer":null,"is_sealed":false,"document_type":2,"description":"Text of Proposed Order","acms_document_guid":""}],"date_created":"2026-09-09T04:44:38.142815-07:00","date_modified":"2026-09-11T14:33:42.641061-07:00","date_filed":"2026-09-09","time_filed":"07:44:17","entry_number":36,"recap_sequence_number":"2026-09-09.003","pacer_sequence_number":119,"description":"Unopposed MOTION for Leave to File Amicus Brief by HYPERLIQUID POLICY CENTER. (Attachments: # 1 Exhibit Proposed Amicus Brief, # 2 Text of Proposed Order)(Prelogar, Elizabeth) (Entered: 09/09/2026)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/477321044/","id":477321044,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/73500937/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/492912763/","id":492912763,"tags":[],"absolute_url":"/docket/73500937/35/chicago-mercantile-exchange-inc-v-selig/","date_created":"2026-09-09T04:40:52.062246-07:00","date_modified":"2026-09-28T12:26:59.221768-07:00","sha1":"da43b38ac9d61c704838dea15f8b10e759cb9fbf","page_count":1,"file_size":235824,"filepath_local":"recap/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.35.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.35.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 1:26-cv-02157-CKK Document 35 Filed 09/09/26 Page 1 of 1\n\n\n\n\n UNITED STATES DISTRICT COURT\n FOR THE DISTRICT OF COLUMBIA\n\n CHICAGO MERCANTILE EXCHANGE INC.,\n\n Plainitff,\n No. 1:26-cv-02157\n v.\n Hon. Colleen Kollar-Kotelly\n MICHAEL S. SELIG, in his official capacity as\n Chairman of the Commodity Futures Trading\n Commission, and COMMODITY FUTURES\n TRADING COMMISSION,\n\n Defendants.\n\n MOTION FOR ADMISSION PRO HAC VICE OF ELIAS S. KIM\n\n Pursuant to Local Civil Rule 83.2, amicus Hyperliquid Policy Center (\u201cHPC\u201d), through its\n\nundersigned counsel, respectfully moves for the admission pro hac vice of attorney Elias S. Kim.\n\n In support of this motion, HPC submits the accompanying Declaration of Elias S. Kim. As\n\nset forth in Mr. Kim\u2019s declaration, he is admitted and is an active member in good standing of the\n\nDistrict of Columbia Bar. Pursuant to the Local Rules, this motion is signed by Elizabeth B.\n\nPrelogar, an active and sponsoring member of the Bar of this Court, and a copy of a certificate of\n\ngood standing issued by the District of Columbia Bar is attached.\n\n\nDated: September 9, 2026 Respectfully submitted,\n\n /s/ Elizabeth B. Prelogar\n Elizabeth B. Prelogar (DC Bar No. 1011890)\n COOLEY LLP\n 1299 Pennsylvania Avenue NW, Suite 700\n Washington, DC 20004-2400\n (202) 842-7800\n eprelogar@cooley.com\n Counsel for Hyperliquid Policy Center\n\f","ocr_status":2,"date_upload":"2026-09-09T07:46:18.137263-07:00","document_number":"35","attachment_number":null,"pacer_doc_id":"045012330685","is_available":true,"is_free_on_pacer":null,"is_sealed":false,"document_type":1,"description":"Appear Pro Hac Vice","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/492912764/","id":492912764,"tags":[],"absolute_url":"/docket/73500937/35/1/chicago-mercantile-exchange-inc-v-selig/","date_created":"2026-09-09T04:40:54.652838-07:00","date_modified":"2026-09-28T06:38:24.802190-07:00","sha1":"1a38214f0fd9fa66b3177cbd3b7330521aaa5932","page_count":6,"file_size":359885,"filepath_local":"recap/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.35.1.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.35.1.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 1:26-cv-02157-CKK Document 35-1 Filed 09/09/26 Page 1 of 6\n\n\n\n UNITED STATES DISTRICT COURT\n DISTRICT OF COLUMBIA\n\n\nCHICAGO MERCANTILE EXCHANGE INC., )\n Plaintiff(s) )\n )\nvs. ) Case Number: 1 :26-cv-02157\n )\nMICHAEL S. SELIG, et al., )\n Defendant(s)\n\n DECLARATION FOR PRO HAC VICE ADMISSION\n (to be attached to Motion for Pro Hae Vice Admission)\n\n In accordance with LCvR 83.2 (c)(2) and LCvR 44.1 (c)(2), I hereby declare that\nthe answers to the following questions are complete, true, and correct:\n1. Full Name: Elias S. Kim\n2. State bar membership number: DC - 1673678\n3. Business address, telephone and fax numbers:\n 1299 Pennsylvania Avenue NW, Suite 700, Washington, District of Columbia 20004-2400\n Telephone: (202) 842-7800; Facsimile: (202) 842-7899\n4. List all state and federal courts or bar associations in which you are a member \"in good standing\"\n to practice law:\n See Exhibit B\n5. Have you been denied admission, disbarred, suspended from practice, reprimanded, denied \"in\n good standing\" status, or otherwise disciplined by any court, bar association, grievance committee\n or administrative toady? Yes[] o[]\n6. Have any proceedings which could lead to any such disciplinary action been instituted against you\n av sun sos@iss? Yes[] o[]\n (Please attach a statement explaining any \"Yes\" answers to questions 5 or 6.)\n\n7. List the number of times the attorney has been admitted pro hac vice into this court within the last\n two years. None\n (If your principal office is located in the District of Columbia, please answer questions 8 and 9.)\n\n8. Are you a member of the DC Bar? Yes\n\n9. Do you have a pending application for admission into USDC for the District of Columbia? No\n\f Case 1:26-cv-02157-CKK Document 35-1 Filed 09/09/26 Page 2 of 6\n\n\n\n In compliance with Local Rule 83.2(b) or LCrR 44.1(b), an attorney who wishes to appear as sole or\nlead counsel in a contested evidentiary hearing or trial on the merits further certifies that he/ she:\n\n (CHECK ALL ITEMS THAT APPLY)\n\n 1. \u25a1 has previously acted as sole or lead counsel in a federal district court or the Superior Court of the District of\n Columbia or a state trial court of general jurisdiction in a contested jury or bench trial or other contested\n evidentiary hearing in which testimony was taken in open court and an order or other appealable judgment was\n entered. [LCvR 83.2(b)(l)/LCrR 44.l(b)(l)]; OR\n\n\n 2. \u25a1 has participated in a junior capacity in an entire contested jury or bench trial in a federal district court or the\n Superior Court of the District of Columbia or a state trial court of general jurisdiction. [LCvR 83.2(b)(2)/LCrR\n 44.1 (b)(2)]; OR\n\n\n has satisfactorily completed a continuing legal education trial advocacy course of at least 30 hours sponsored\n by the District of Columbia Bar or accredited by a State Bar. [LCvR 83.2(b)(3)/LCrR 44.1 (b)(3)]\n\n\n\n\n I declare under penalty of perjury that the foregoing is true and corr ],\n\n semers3@ zaA/ '\n DATE SIGNATURE OF ATTORNEY\n\n\n\n\n 2\n\fCase 1:26-cv-02157-CKK Document 35-1 Filed 09/09/26 Page 3 of 6\n\n\n\n\n EXHIBIT A\n\fCase 1:26-cv-02157-CKK Document 35-1 Filed 09/09/26 Page 4 of 6\n\n\n\n\n On behalf of JULIO A. CASTILLO, Clerk of the District of Columbia Court of Appeals,\n the District of Columbia Bar does hereby certify that\n\n\n\n Elias Stull Kim\n was duly qualified and admitted on May 13, 2020 as an attorney and counselor entitled to\n practice before this Court; and is, on the date indicated below, an Active member in good\n standing of this Bar.\n\n\n\n\n In Testimony Whereof,\n I have hereunto subscribed my\n name and affixed the seal of this\n Court at the City of\n Washington, D.C., on July 29, 2026.\n\n\n\n\n JULIO A. CASTILLO\n Clerk of the Court\n\n\n\n\n Issued By:\n\n\n David Chu - Director, Membership\n District of Columbia Bar Membership\n\n\n\n\nFor questions or concerns, please contact the D.C. Bar Membership Office at 202-626-3475 or email\n memberservices@dcbar.org.\n\fCase 1:26-cv-02157-CKK Document 35-1 Filed 09/09/26 Page 5 of 6\n\n\n\n\n EXHIBIT B\n\f Case 1:26-cv-02157-CKK Document 35-1 Filed 09/09/26 Page 6 of 6\n\n\n\n\n Court Admissions for Elias S. Kim\n\n\n\nU.S. Court Date of Admission\n\nUnited States Supreme Court January 12, 2026\nU.S.C.A. First Circuit January 12, 2026\nU.S.C.A. Second Circuit July 24, 2026\nU.S.C.A. Third Circuit March 18, 2026\nU.S.C.A. Fourth Circuit January 5, 2026\nU.S.C.A. Ninth Circuit July 28, 2025\nU.S.C.A. Tenth Circuit September 21, 2022\nU.S.C.A. Eleventh Circuit July 26, 2025\nU.S.C.A. Federal Circuit March 5, 2021\nU.S.C.A. D.C. Circuit April 22, 2026\nU.S.D.C. D. Colo. October 21, 2025\n\n\nState/DC Court Date of Admission\n\nWashington, D.C. May 13, 2020\n\f","ocr_status":1,"date_upload":"2026-09-09T07:46:20.012874-07:00","document_number":"35","attachment_number":1,"pacer_doc_id":"045012330686","is_available":true,"is_free_on_pacer":null,"is_sealed":false,"document_type":2,"description":"Declaration Declaration of Elias S. Kim in support of Motion for Admission Pro H","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/492912765/","id":492912765,"tags":[],"absolute_url":"/docket/73500937/35/2/chicago-mercantile-exchange-inc-v-selig/","date_created":"2026-09-09T04:40:54.665731-07:00","date_modified":"2026-09-09T07:45:37.636441-07:00","sha1":"","page_count":1,"file_size":128914,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"35","attachment_number":2,"pacer_doc_id":"045012330687","is_available":false,"is_free_on_pacer":null,"is_sealed":false,"document_type":2,"description":"Text of Proposed Order","acms_document_guid":""}],"date_created":"2026-09-09T04:40:52.024581-07:00","date_modified":"2026-09-11T14:33:42.615939-07:00","date_filed":"2026-09-09","time_filed":"07:40:05","entry_number":35,"recap_sequence_number":"2026-09-09.002","pacer_sequence_number":117,"description":"MOTION for Leave to Appear Pro Hac Vice :Attorney Name- Elias S. Kim, Filing fee $ 100, receipt number ADCDC-12659995. Fee Status: Fee Paid. by HYPERLIQUID POLICY CENTER. (Attachments: # 1 Declaration Declaration of Elias S. Kim in support of Motion for Admission Pro Hac Vice, # 2 Text of Proposed Order)(Prelogar, Elizabeth) (Entered: 09/09/2026)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/477168611/","id":477168611,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/73500937/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/492756573/","id":492756573,"tags":[],"absolute_url":"/docket/73500937/33/chicago-mercantile-exchange-inc-v-selig/","date_created":"2026-09-08T07:08:39.793979-07:00","date_modified":"2026-09-28T20:29:36.633360-07:00","sha1":"ff6abac037edbb1862f7623bfabeec97339f95dd","page_count":1,"file_size":72023,"filepath_local":"recap/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.33.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.33.0.pdf","ia_upload_failure_count":null,"thumbnail":"recap-thumbnails/gov.uscourts.dcd.293632/492756573.thumb.1068.png","thumbnail_status":1,"plain_text":" Case 1:26-cv-02157-CKK Document 33 Filed 09/08/26 Page 1 of 1\n\n\n\n\n UNITED STATES DISTRICT COURT\n FOR THE DISTRICT OF COLUMBIA\n\n\n CHICAGO MERCANTILE EXCHANGE,\n INC.,\n\n Plaintiff,\n V.\n Civil Action No. 26-2157 (CKK)\n MICHAEL S. SELIG, in his official capacity\n as Chairman of the Commodity Futures\n Trading Commission, et al.,\n\n Defendants.\n\n\n ORDER\n (September 8, 2026)\n\n Upon consideration of the parties' [32] Joint Proposed Briefing Schedule, it is hereby\n\nORDERED that the parties shall adhere to the following briefing schedule:\n\n \u2022 September 11, 2026 -Defendants move for leave to seek discovery from CME\n on standing (10-page limit)\n \u2022 September 18, 2026 - CME opposes Defendants' motion for leave to seek\n discovery (10-page limit)\n \u2022 September 23, 2026 - Defendants reply in support of motion for leave to seek\n discovery (5-page limit)\n \u2022 October 2, 2026 - CME opposes Defendants' motion to dismiss\n \u2022 October 16, 2026 -Defendants reply in support of motion to dismiss\n \u2022 November 13, 2026- Discovery cut-off, to the extent discovery is permitted\n \u2022 November 20, 2026 -Parties will file cross-motions for summary judgment\n \u2022 December 4, 2026 - Amicus briefs, if any, will be filed\n \u2022 December 14, 2026 - Parties will cross-file oppositions to motions for\n summary judgment\n\n SO ORDERED.\n\n COLLEEN KOLLAR-KOTELLY\n United States District Judge\n\n I\n\f","ocr_status":2,"date_upload":"2026-09-08T07:15:07.093987-07:00","document_number":"33","attachment_number":null,"pacer_doc_id":"045012328074","is_available":true,"is_free_on_pacer":null,"is_sealed":false,"document_type":1,"description":".Order","acms_document_guid":""}],"date_created":"2026-09-08T07:08:39.697368-07:00","date_modified":"2026-09-11T14:33:42.534063-07:00","date_filed":"2026-09-08","time_filed":"10:08:04","entry_number":33,"recap_sequence_number":"2026-09-08.001","pacer_sequence_number":111,"description":"ORDER setting briefing schedule. Signed by Judge Colleen Kollar-Kotelly on 9/8/2026. (lcckk3) (Entered: 09/08/2026)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/477008494/","id":477008494,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/73500937/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/492587480/","id":492587480,"tags":[],"absolute_url":"/docket/73500937/32/chicago-mercantile-exchange-inc-v-selig/","date_created":"2026-09-04T11:50:20.154426-07:00","date_modified":"2026-09-09T12:39:54.062529-07:00","sha1":"7889c17dfd77387d75b7ca57a9d9e8d04956a931","page_count":2,"file_size":414114,"filepath_local":"recap/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.32.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.32.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 1:26-cv-02157-CKK Document 32 Filed 09/04/26 Page 1 of 2\n\n\n\n\n UNITED STATES DISTRICT COURT\n FOR THE DISTRICT OF COLUMBIA\n\n CHICAGO MERCANTILE EXCHANGE\n INC.,\n\n Plaintiff, Case No. 1:26-cv-02157-CKK\n\n v.\n\n MICHAEL S. SELIG, in his official capacity\n as Chairman of the Commodity Futures\n Trading Commission; COMMODITY\n FUTURES TRADING COMMISSION,\n\n Defendants.\n\n PARTIES\u2019 JOINT PROPOSED BRIEFING SCHEDULE\n\n In accordance with the Court\u2019s order dated August 27, 2026 (Dkt. No. 29), the parties\n\njointly submit a proposed briefing schedule for all dispositive motions in this matter. The parties\n\ndisagree over whether Defendants Chairman Michael S. Selig and the Commodity Futures Trading\n\nCommission (collectively, \u201cCFTC\u201d or \u201cCommission\u201d) are entitled to take discovery from Plaintiff\n\nChicago Mercantile Exchange, Inc. (\u201cCME\u201d) about Plaintiff\u2019s standing. To efficiently resolve the\n\nissue, Defendants have agreed to seek leave from the Court before serving any discovery requests,\n\nas reflected in the proposed schedule below.1\n\nProposed Briefing Schedule\n\nSeptember 11, 2026 \u2013 Defendants move for leave to seek discovery from CME on standing (10-\npage limit)\n\nSeptember 18, 2026 \u2013 CME opposes Defendants\u2019 motion for leave to seek discovery (10-page\nlimit)\n\nSeptember 23, 2026 \u2013 Defendants reply in support of motion for leave to seek discovery (5-page\nlimit)\n\n\n 1\n CME reserves all rights regarding discovery.\n 1\n\f Case 1:26-cv-02157-CKK Document 32 Filed 09/04/26 Page 2 of 2\n\n\n\n\nOctober 2, 2026 \u2013 CME opposes Defendants\u2019 motion to dismiss\n\nOctober 16, 2026 \u2013 Defendants reply in support of motion to dismiss\n\nNovember 13, 2026 \u2013 Discovery cut-off, to the extent discovery is permitted\n\nNovember 20, 2026 \u2013 Parties will file cross-motions for summary judgment\n\nDecember 4, 2026 \u2013 Amicus briefs, if any, will be filed\n\nDecember 14, 2026 \u2013 Parties will cross-file oppositions to motions for summary judgment\n\n\n\n Dated: September 4, 2026 Respectfully submitted by:\n\n\n /s/ Aitan D. Goelman /s/ M. Jordan Minot\n Aitan D. Goelman (D.C. Bar No. 446636) M. Jordan Minot (DC Bar No. 1722554)\n Ivano M. Ventresca (D.C. Bar No. 1045769)\n Brian J. Beaton, Jr. (D.C. Bar No. 90020963) TYLER S. BADGLEY\n General Counsel\n ZUCKERMAN SPAEDER LLP M. JORDAN MINOT\n 2100 L Street NW, Suite 400 Deputy General Counsel\n Washington, DC 20037 ANDREW J. WEISBERG\n Tel: (202) 778-1800 Senior Assistant General Counsel\n Fax: (202) 822-8136 HENRY J. DICKMAN\n agoelman@zuckerman.com Senior Assistant General Counsel\n iventresca@zuckerman.com CARLIN METZGER\n bbeaton@zuckerman.com Senior Assistant General Counsel\n\n Attorneys for Plaintiff Chicago Mercantile U.S. Commodity Futures Trading Commission\n Exchange, Inc. 1155 21st Street, NW\n Washington, DC 20581\n Tel: (202) 209-1087\n Fax: (202) 418-5567\n tbadgley@cftc.gov\n jminot@cftc.gov\n aweisberg@cftc.gov\n hdickman@cftc.gov\n cmetzger@cftc.gov\n\n Attorneys for Defendants Michael S. Selig and\n CFTC\n\n\n\n\n 2\n\f","ocr_status":2,"date_upload":"2026-09-04T11:51:19.169090-07:00","document_number":"32","attachment_number":null,"pacer_doc_id":"045012325924","is_available":true,"is_free_on_pacer":null,"is_sealed":false,"document_type":1,"description":"Proposed Briefing Schedule","acms_document_guid":""}],"date_created":"2026-09-04T11:50:20.131560-07:00","date_modified":"2026-09-11T14:33:42.503688-07:00","date_filed":"2026-09-04","time_filed":"14:49:31","entry_number":32,"recap_sequence_number":"2026-09-04.001","pacer_sequence_number":109,"description":"PROPOSED BRIEFING SCHEDULE Parties' Joint Proposed Briefing Schedule by COMMODITY FUTURES TRADING COMMISSION, MICHAEL S. SELIG. 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SELIG. (Minot, Martin) (Entered: 09/02/2026)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/476744756/","id":476744756,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/73500937/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/492316592/","id":492316592,"tags":[],"absolute_url":"/docket/73500937/30/chicago-mercantile-exchange-inc-v-selig/","date_created":"2026-09-02T15:45:45.558065-07:00","date_modified":"2026-09-09T06:55:07.380189-07:00","sha1":"29caaf11c3b4a158fe9efb907ee9df38b46c2c9c","page_count":2,"file_size":320780,"filepath_local":"recap/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.30.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.30.0.pdf","ia_upload_failure_count":null,"thumbnail":"recap-thumbnails/gov.uscourts.dcd.293632/492316592.thumb.1068.png","thumbnail_status":1,"plain_text":" Case 1:26-cv-02157-CKK Document 30 Filed 09/02/26 Page 1 of 2\n\n\n\n\n UNITED STATES DISTRICT COURT\n FOR THE DISTRICT OF COLUMBIA\n\n CHICAGO MERCANTILE EXCHANGE\n INC.,\n\n Plaintiff,\n\n v. Case No. 1:26-cv-02157\n\n MICHAEL S. SELIG, in his official capacity as ORAL HEARING\n Chairman of the Commodity Futures Trading REQUESTED\n Commission; COMMODITY FUTURES\n TRADING COMMISSION,\n\n Defendants.\n\n\n MOTION TO DISMISS\n\n Defendants Michael S. Selig and the Commodity Futures Trading Commission hereby\n\nmove to dismiss Plaintiff Chicago Mercantile Exchange Inc.\u2019s Complaint (Dkt. No. 1) pursuant to\n\nFederal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Defendants\u2019 motion is supported by the\n\naccompanying Statement of Points and Authorities. A Proposed Order is attached. Defendants\n\nrespectfully request an oral hearing.\n\f Case 1:26-cv-02157-CKK Document 30 Filed 09/02/26 Page 2 of 2\n\n\n\n\nDated: September 2, 2026 Respectfully Submitted,\n\n /s/ M. Jordan Minot\n M. Jordan Minot (DC Bar No. 1722554)\n\n TYLER S. BADGLEY\n General Counsel\n M. JORDAN MINOT\n Deputy General Counsel\n ANDREW J. WEISBERG\n Senior Assistant General Counsel\n HENRY J. DICKMAN\n Senior Assistant General Counsel\n ANNE W. STUKES\n Senior Assistant General Counsel\n CARLIN METZGER\n Senior Assistant General Counsel\n MARGARET P. AISENBREY\n Senior Assistant General Counsel\n\n U.S. Commodity Futures Trading Commission\n Three Lafayette Centre\n 1155 21st Street, NW\n Washington, DC 20581\n Tel: (202) 209-1087\n Fax: (202) 418-5567\n tbadgley@cftc.gov\n jminot@cftc.gov\n aweisberg@cftc.gov\n hdickman@cftc.gov\n astukes@cftc.gov\n cmetzger@cftc.gov\n maisenbrey@cftc.gov\n\n Attorneys for Defendants\n\f","ocr_status":2,"date_upload":"2026-09-03T04:12:32.780991-07:00","document_number":"30","attachment_number":null,"pacer_doc_id":"045012320938","is_available":true,"is_free_on_pacer":null,"is_sealed":false,"document_type":1,"description":"Dismiss AND Dismiss/Lack of Jurisdiction","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/492316593/","id":492316593,"tags":[],"absolute_url":"/docket/73500937/30/1/chicago-mercantile-exchange-inc-v-selig/","date_created":"2026-09-02T15:45:48.179556-07:00","date_modified":"2026-09-09T06:55:14.367007-07:00","sha1":"e29512e16c3823ff9e4518f708c3fa726fd9e3f6","page_count":30,"file_size":381192,"filepath_local":"recap/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.30.1.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.30.1.pdf","ia_upload_failure_count":null,"thumbnail":"recap-thumbnails/gov.uscourts.dcd.293632/492316593.thumb.1068.png","thumbnail_status":1,"plain_text":" Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 1 of 30\n\n\n\n\n UNITED STATES DISTRICT COURT\n FOR THE DISTRICT OF COLUMBIA\n\nCHICAGO MERCANTILE EXCHANGE\nINC.,\n\n Plaintiff,\n\n v. Case No. 1:26-cv-02157\n\nMICHAEL S. SELIG, in his official capacity as\nChairman of the Commodity Futures Trading\nCommission; COMMODITY FUTURES\nTRADING COMMISSION,\n\n Defendants.\n\n\n\n\n STATEMENT OF POINTS AND AUTHORITIES\n IN SUPPORT OF MOTION TO DISMISS\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 2 of 30\n\n\n\n\n TABLE OF CONTENTS\n\nINTRODUCTION ...........................................................................................................................1\nBACKGROUND .............................................................................................................................3\n I. The CFTC\u2019s Regulation of U.S. Derivatives Markets .........................................................3\n II. Commission approval of perpetual-futures contracts ..........................................................6\nLEGAL STANDARD ....................................................................................................................10\n\nARGUMENT .................................................................................................................................10\n\n I. CME lacks standing to bring its claims .............................................................................10\n\n A. There is no injury to CME ...........................................................................................11\n\n 1. CME fails to allege a financial injury to its bottom line ........................................12\n\n 2. CME fails to allege actual or imminent increase in competition ...........................17\n\n B. CME\u2019s alleged injury would not be redressed by a favorable decision .......................19\n\n II. CME\u2019s claim is not in the \u201czone of interests\u201d protected by the CEA ..........................22\n\nCONCLUSION ..............................................................................................................................24\n\n\n\n\n 1\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 3 of 30\n\n\n\n\n TABLE OF AUTHORITIES\n\nCases\n\nAir Courier Conference v. American Postal Workers Union,\n 498 U.S. 517 (1991) .............................................................................................................21, 22\n\n*Air Excursions LLC v. Yellen,\n 66 F.4th 272 (D.C. Cir. 2023)...................................................................................11, 12, 17\u201318\n\nArpaio v. Obama,\n 797 F.3d 11 (D.C. Cir. 2015)......................................................................................................10\n\nAshcroft v. Iqbal,\n 556 U.S. 662 (2009) .............................................................................................................10, 13\n\nBanner Health v. Burwell,\n 126 F. Supp. 3d 28 (D.D.C. 2015)..............................................................................................14\n\nCFTC v. R.J. Fitzgerald & Co.,\n 310 F.3d 1321 (11th Cir. 2002) ..................................................................................................24\n\nCitizens for Responsibility & Ethics in Washington v. Trump,\n 971 F.3d 102 (2d Cir. 2020) .......................................................................................................13\n\nCitizens for Responsibility & Ethics in Washington v. Trump,\n 953 F.3d 178 (2d Cir. 2019) .......................................................................................................11\n\nClapper v. Amnesty International USA,\n 568 U.S. 398 (2013) .............................................................................................................10, 20\n\nCounty of Delaware v. Department of Transp.,\n 554 F.3d 143 (D.C. Cir. 2009)....................................................................................................19\n\nCSL Plasma Inc. v. U. S. Customs & Border Protection,\n 33 F.4th 584 (D.C. Cir. 2022)...............................................................................................22, 23\n\nDiamond Alternative Energy, LLC v. EPA,\n 606 U.S. 100 (2025) ...................................................................................................................21\n\nFood & Water Watch, Inc. v. Vilsack,\n 808 F.3d 905 (D.C. Cir. 2015)....................................................................................................10\n\nFriends of Animals v. Ashe,\n 174 F. Supp. 3d 20 (D.D.C. 2016)..............................................................................................20\n\nFulani v. Brady,\n 935 F.2d 1324 (D.C. Cir. 1991)..................................................................................................17\n\n\n 2\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 4 of 30\n\n\n\n\nHeffernan v. City of Paterson,\n 578 U.S. 266 (2016) ...................................................................................................................14\n\nHoneywell Int\u2019l Inc. v. EPA,\n 374 F.3d 1363 (D.C. Cir. 2004)..................................................................................................20\n\nHurd v. District of Columbia,\n 864 F.3d 671 (D.C. Cir. 2017)....................................................................................................10\n\nImmigrant Advocates. Response Collaborative v. United States,\n 2026 WL 746923 (D.D.C. Mar. 17, 2026) .................................................................................10\n\nKERM, Inc. v. FCC,\n 353 F.3d 57 (D.C. Cir. 2004)................................................................................................12, 13\n\nLexmark International v. Static Control Components, Inc.,\n 572 U.S. 118 (2014) ...................................................................................................................22\n\nLouisiana Energy & Power Auth. v. FERC,\n 141 F.3d 364 (D.C. Cir. 1998)....................................................................................................19\n\nLujan v. Defenders of Wildlife,\n 504 U.S. 555 (1992) ...................................................................................................................11\n\nMackinac Ctr. for Public Policy v. Cardona,\n 102 F.4th 343 (6th Cir. 2024) ...............................................................................................13\u201314\n\nMerrill Lynch, Pierce, Fenner & Smith, Inc. v. Curran,\n 456 U.S. 353 (1982) .....................................................................................................................3\n\nModernWest Longmont, LLC v. FAA,\n 177 F.4th 290 (D.C. Cir. 2026)...................................................................................................21\n\nNew World Radio, Inc. v. FCC,\n 294 F.3d 164 (D.C. Cir. 2002)....................................................................................................13\n\n*PSSI Global Services., L.L.C. v. FCC,\n 983 F.3d 1 (D.C. Cir. 2020)................................................................................12, 13, 16, 17\u201318\n\nTransUnion LLC v. Ramirez,\n 594 U.S. 413 (2021) .....................................................................................................................1\n\nStatutes\n7 U.S.C. \u00a7 1a ..................................................................................................................................22\n7 U.S.C. \u00a7 2 ..................................................................................................................................2, 5\n7 U.S.C. \u00a7 5 ..........................................................................................................................5, 23, 24\n\n 3\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 5 of 30\n\n\n\n\n7 U.S.C. \u00a7 7 ..................................................................................................................................3, 4\n7 U.S.C. \u00a7 7a-2 .................................................................................................................5, 6, 20, 23\nCommodity Futures Modernization Act of 2000,\n Pub. L. No. 106-554, App. E, \u00a7 105(b), 114 Stat. 2763A\u2013365, 2763A\u2013379 (2000) ....................5\n\nDodd-Frank Wall Street Reform and Consumer Protection Act,\n Pub. L. No. 111-203, \u00a7 722, 124 Stat. 1376, 1672 (2010) ............................................................5\nRegulations\n17 C.F.R. \u00a7 40.2 .....................................................................................................................5, 6, 20\n17 C.F.R. \u00a7 40.3 .......................................................................................................................6, 8, 9\nRules\nFed. R. Civ. P. 12(b)(1) .................................................................................................................. 11\nFed. R. Civ. P. 12(b)(6) ..................................................................................................................21\nFed. R. Evid. P. 201(b) ...................................................................................................................14\nOther Authorities\nPolicy Statement Concerning Swap Transactions,\n 54 Fed. Reg. 30,694 (July 21, 1989) .............................................................................................4\nFurther Definition of \u201cSwap,\u201d \u201cSecurity-Based Swap,\u201d and \u201cSecurity-Based Swap Agreement\u201d;\n Mixed Swaps; Security-Based Swap Agreement Recordkeeping,\n 77 Fed. Reg. 48,208 (Aug. 13, 2012)......................................................................................5, 20\nPolicy Statement Concerning the Listing of Perpetual Contracts,\n 91 Fed. Reg. 33,160 (June 3, 2026) ........................................................................................9, 10\n\nHenry T.C. Hu, Swaps, The Modern Process of Financial Innovation and the Vulnerability of a\nRegulatory Paradigm, 138 U. Pa. L. Rev. 333, 347 (1989) ............................................................4\n\nJerry W. Markham, The History of Commodity Futures\n Trading and its Regulation 233 (1987).........................................................................................4\n\nMark D. Young & William L. Stein, Swap Transactions Under the Commodity Exchange Act: Is\nCongressional Action Needed?, 76 Geo. L.J. 1917, 1938 (1988) ...................................................4\n\nCFTC Letter No. 26-19, No-Action Positions Regarding Removal of Expiration Dates from\nExisting Digital Commodity Perpetual-Style Futures Contracts (June 12, 2026) ........................ 8, 9\n\n\n\n\n 4\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 6 of 30\n\n\n\n\n Defendants Michael S. Selig and the Commodity Futures Trading Commission (\u201cCFTC\u201d\n\nor \u201cCommission\u201d) file this statement of points and authorities in support of their motion to dismiss\n\nthe complaint filed by Plaintiff Chicago Mercantile Exchange Inc. (\u201cCME\u201d), Dkt. No. 1\n\n(\u201cCompl.\u201d).\n\n INTRODUCTION\n\n This lawsuit is much ado about nothing. CME claims to be injured by a CFTC order\n\nauthorizing \u201cperpetual futures contracts\u201d on digital assets like bitcoin, see Dkt. No. 1.1 (\u201cOrder\u201d),\n\nas well as a policy statement concerning perpetual futures more generally, see Dkt. No. 1.2\n\n(\u201cPolicy Statement\u201d). CME does not argue that it could not list this same type of futures contract\u2014\n\nindeed, the Order and Policy Statement clarify that any CFTC-registered exchange can list\n\nperpetual futures on digital assets. Nor does CME argue that the Commission lacked authority to\n\napprove the listing of this type of contract. Instead, it claims that the Commission should have\n\nlabeled them as \u201cswaps\u201d rather than \u201cfutures.\u201d\n\n CME is wrong on the merits\u2014perpetual futures are futures. But there is a more\n\nfundamental defect with this lawsuit: CME lacks standing. Article III requires that \u201cplaintiffs must\n\nbe able to sufficiently answer the question: \u2018What\u2019s it to you?[,]\u2019\u201d and CME has no serious answer\n\nto that question. TransUnion LLC v. Ramirez, 594 U.S. 413, 423 (2021). It claims to suffer a\n\n\u201ctextbook competitive injury\u201d because fellow exchange Kalshi (another CFTC Designated\n\nContract Market or \u201cDCM\u201d) can now \u201coffer new derivatives products that will directly compete\n\nwith CME\u2019s existing offerings in the market for retail investors.\u201d Compl. \u00b6 10. But CME makes\n\nno plausible allegation that its bottom line will be affected by the Order. To the contrary, CME\n\nhas publicly stated that its customers are not demanding perpetual futures, and its own publicly\n\navailable data indicates that trading volume on its cryptocurrency futures contracts actually\n\n\n\n 1\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 7 of 30\n\n\n\n\nincreased after the Commission issued the Order. Furthermore, the Commission\u2019s Order clarifies\n\nthat \u201cKalshi and other DCMs [can] list for trading\u201d perpetual futures contracts based on digital\n\ncommodities, Order at 8 (emphasis added), so CME is free to list the same type of perpetual futures\n\nas Kalshi or other DCMs. Thus, even if CME\u2019s vague assertions of competitive injury had any\n\nsubstance, those injuries are entirely self-inflicted and based on CME\u2019s refusal to list perpetual\n\nfutures for trading.\n\n Even if CME were injured by choosing not to list a contract that its competitors do, that\n\ninjury is not redressable. CME\u2019s claim is not that the Commission cannot approve perpetual\n\nfutures for trading. Rather, it is that the Commission should have classified these contracts as\n\n\u201cswaps\u201d rather than as \u201cfutures.\u201d Even if CME were right about that, a decision in its favor would\n\nnot remedy any purported injury: Kalshi and other DCMs could simply offer the contracts as\n\n\u201cswaps\u201d rather than \u201cfutures\u201d and, under CME\u2019s argument, would be on legally solid ground. That\n\nclassification change may entail \u201cregulatory and tax differences,\u201d Compl. \u00b6 105, but there is no\n\nplausible allegation that CME\u2019s alleged competitive injuries would be abated simply because third-\n\nparty DCMs and traders would be subject to different tax, reporting, or recordkeeping\n\nrequirements.\n\n Finally, CME is not within the \u201czone of interests\u201d protected by the Commodity Exchange\n\nAct (\u201cCEA\u201d). Congress enacted the CEA to create a national system of futures markets with a\n\nnational regulator and a self-regulatory structure to foster consumer protection and innovation in\n\nthe CFTC\u2019s regulated marketplaces. CME\u2019s lawsuit seeks to use the CEA to protect its business\n\nfrom a competitor\u2019s classification decisions and stifle innovation. That goal is contrary to the\n\ninterests the CEA protects and CME\u2019s claims should therefore be dismissed.\n\n For these reasons, Defendants respectfully request that the Court dismiss the complaint.\n\n\n\n 2\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 8 of 30\n\n\n\n\n BACKGROUND\n\nI. The CFTC\u2019s Regulation of U.S. Derivatives Markets\n\n The Commodity Exchange Act gives the CFTC \u201cexclusive jurisdiction\u201d to regulate\n\n American commodity derivatives markets. 7 U.S.C. \u00a7 2(a)(1)(A). A \u201cderivative\u201d is a financial\n\n instrument whose price \u201cis directly dependent upon (i.e. derived from) the value of one or more\n\n underlying\u201d assets or measures, like \u201ccommodities,\u201d \u201csecurities\u201d or \u201cany agreed upon pricing\n\n index or arrangement.\u201d 1 Futures contracts, options, and swaps are all types of derivatives.\n\n Derivatives markets originated in agriculture. Prior to the 19th century, \u201c[w]hen an entire\n\n crop was harvested and marketed within a short time-span, dramatic price fluctuations sometimes\n\n created severe hardship for farmers or for processors.\u201d Merrill Lynch, Pierce, Fenner & Smith,\n\n Inc. v. Curran, 456 U.S. 353, 357 (1982). To hedge against those fluctuations, farmers entered\n\n into futures contracts, which allowed them to fix \u201can agreed price on the basis of their judgment\n\n about expected market conditions at the time of delivery.\u201d Id. Their counterparties were\n\n speculators, \u201cwho owned no present interest in a commodity but anticipated a price [change]\u201d and\n\n sought to profit from it. Id. While these contracts were nominally for \u201cfuture delivery\u201d of an\n\n agricultural commodity, they were virtually always financially settled and rarely involved actual\n\n delivery. Hedgers and speculators traded contracts with one another on organized exchanges,\n\n which today are CFTC-registered DCMs. 7 U.S.C. \u00a7 7.\n\n Because the CEA does not contain a definition of a futures contract, exchanges have for\n\n decades pushed the frontier of what constitutes a futures contract, and those financial innovations\n\n have proven instrumental to the vibrancy of American capital markets. Indeed, CME has\n\n\n\n\n 1\n CFTC Glossary, \u201cDerivative,\u201d https://www.cftc.gov/LearnAndProtect/\n AdvisoriesAndArticles/CFTCGlossary/index.htm (last visited Aug. 4, 2026).\n\n 3\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 9 of 30\n\n\n\n\nhistorically been at the forefront of this innovation. Over the course of the 20th century, CME\n\nexpanded the futures contracts it offered to include a range of non-agricultural commodities\u2014\n\nincluding precious metals, foreign-exchange rates, real estate, the level of the S&P 500, U.S.\n\nTreasury bonds, and the weather. 2 CME\u2019s launch of its \u201cGlobex\u201d system in 1992 was instrumental\n\nin the evolution of the markets to electronic trading. 3 CME also launched the S&P 500 e-Mini\n\nsuite to make futures trading of financially-settled products on this important financial index more\n\naccessible to retail investors. 4\n\n Swaps were another evolution in derivatives markets that first appeared in the 1980s. One\n\nof the first iterations was the interest-rate swap, which \u201c[i]n its most basic form\u201d involves (a) \u201cone\n\nparty (typically called the \u2018fixed rate payor\u2019) agreeing to make periodic payments to the other party\n\nwhich are fixed in amount in return for (b) the other party (typically called the \u201cfloating rate payor\u201d\n\nor the \u201cvariable rate payor\u201d) agreeing to make periodic payments to the first party that vary with\n\nthe \u2018prime rate,\u2019 \u2018LIBOR,\u2019 or some other benchmark of market interest rates.\u201d Henry T.C. Hu,\n\nSwaps, The Modern Process of Financial Innovation and the Vulnerability of a Regulatory\n\nParadigm, 138 U. Pa. L. Rev. 333, 347 (1989). Markets quickly recognized that \u201cswaps serve\n\neconomic functions identical to futures contracts\u201d and that \u201c[m]any swaps [] satisfy the technical\n\ncriteria of the futures contract definition.\u201d Mark D. Young & William L. Stein, Swap Transactions\n\nUnder the Commodity Exchange Act: Is Congressional Action Needed?, 76 Geo. L.J. 1917, 1938\n\n\n\n 2\n CME Group, Midwest Grain Trade: History of Futures Exchanges,\nhttps://www.cmegroup.com/education/courses/introduction-to-futures/midwest-grain-trade-\nhistory-of-futures-exchanges (last visited Aug. 26, 2026); CME Group Overview,\nhttps://www.cmegroup.com/company/visit/files/cme-group-overview.pdf (last visited Aug. 26,\n2026); CME Group, 2017 Product Anniversaries, https://www.cmegroup.com/company/product-\nanniversaries.html (last visited Aug. 26, 2026).\n 3\n Id.\n 4\n Id.; see also Compl. \u00b6\u00b6 31\u201336.\n\n 4\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 10 of 30\n\n\n\n\n(1988); see also Jerry W. Markham, The History of Commodity Futures Trading and its Regulation\n\n233 (1987) (\u201cIn effect, [swap] transactions provide many of the same benefits as the futures\n\nmarkets.\u201d).\n\n After the Great Recession of 2008, which many attributed in large part to credit-default\n\nswaps, Congress subjected swaps to the CFTC\u2019s \u201cexclusive jurisdiction.\u201d See Dodd-Frank Wall\n\nStreet Reform and Consumer Protection Act, Pub. L. No. 111-203, \u00a7 722, 124 Stat. 1376, 1672\n\n(2010) (codified at 7 U.S.C. \u00a7 2(a)(1)(A)). Congress also required many swaps to be traded on a\n\nDCM. Id. \u00a7 723(a)(2) (codified at 7 U.S.C. \u00a7 2(e)). As CME itself recognized, the Dodd-Frank\n\namendments \u201celiminated\u201d \u201cvirtually all significant distinctions between futures and swaps.\u201d 5 See\n\nalso 77 Fed. Reg. 48,208, 48,303 (Aug. 13, 2012) (\u201cPrior distinctions that the CFTC relied upon\n\n(such as the presence or absence of clearing) to distinguish between futures and swaps may no\n\nlonger be relevant.\u201d).\n\n The CEA establishes a framework of \u201cself-regulation\u201d \u201cunder the oversight of the\n\nCommission,\u201d 7 U.S.C. \u00a7 5(b), and it contemplates that DCMs typically determine whether a\n\nderivatives contract will be listed as a future, option, or swap. See id. \u00a7 7a-2(c)(1) (\u201cA registered\n\nentity may elect to list for trading or accept for clearing any new contract . . . by providing to the\n\nCommission . . . a written certification that the new contract . . . complies with this chapter\n\n(including regulations under this chapter).\u201d). To that end, Commission Rule 40.2 allows a DCM\n\nto self-certify a contract by submitting information about the contract to the Commission and\n\ncertifying that it complies with the CEA and Commission regulations. 17 C.F.R. \u00a7 40.2(a). Thus,\n\n\u201c[i]f a DCM has a view that a particular product is a futures contract, it may self-certify the contract\n\nconsistent with that view.\u201d 77 Fed. Reg. at 48,303. Unless the Commission issues a stay, a DCM\n\n\n 5\n Letter from Craig S. Donohue to David Stawick dated July 22, 2011, at 4, available at\nhttps://comments.cftc.gov/PublicComments/ViewComment.aspx?id=47929.\n 5\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 11 of 30\n\n\n\n\n can list its self-certified contract after one complete business day has elapsed. 17 C.F.R.\n\n \u00a7 40.2(a)(2), (c). And even where the Commission issues a stay, it nonetheless \u201cshall approve\u201d\n\n the contract \u201cunless the Commission finds that the new contract . . . would violate [the CEA]\n\n (including regulations).\u201d 7 U.S.C. \u00a7 7a-2(c)(5)(B) (emphasis added).\n\n In the alternative, Commission Rule 40.3 allows a DCM to request that the Commission\n\n review and approve a new contract prior to listing it for trading and clearing. 17 C.F.R. \u00a7 40.3(a);\n\n see also 7 U.S.C. \u00a7 7a-2(c)(4)(A) (\u201cA registered entity may request that the Commission grant\n\n prior approval to any new contract. . . .\u201d). Again, \u201c[t]he Commission shall approve a new product\n\n unless the terms and conditions of the product violate the Act or the Commission\u2019s regulations.\u201d\n\n 17 C.F.R. \u00a7 40.3(b) (emphasis added); see also 7 U.S.C. \u00a7 7a-2(c)(5)(B) (same). Unless the\n\n Commission issues a notice of non-approval, the contract is \u201cdeemed approved\u201d after the\n\n conclusion of a review period of 45 days or more. 17 C.F.R. \u00a7 40.3(d).\n\nII. Commission approval of perpetual-futures contracts\n\n This case is about \u201cperpetual futures contracts.\u201d Like all futures contracts, perpetual\n\n futures allow traders to hedge and speculate on the future price movements of a commodity without\n\n acquiring that commodity. Specifically, a trader can take a \u201clong\u201d or \u201cshort\u201d position on a\n\n commodity\u2014the \u201clong\u201d profits when the price rises, and the \u201cshort\u201d profits when the price falls.\n\n And like a future with a fixed expiration, perpetual futures require traders to post collateral, known\n\n as \u201cmargin,\u201d and when losses exceed the posted margin, the exchange will force closure of the\n\n trader\u2019s position. For example, imagine a trader takes a $10,000 \u201clong\u201d position on a bitcoin\n\n perpetual future and is required to post $1,000 (10%) in margin. If the price of the bitcoin perpetual\n\n increases by 5%, the trader will earn $500\u2014which is a 50% return on the $1,000 margin. By\n\n contrast, if the price of the bitcoin perpetual falls by 5%, the trader will lose $500 (a 50% loss).\n\n Futures with fixed expirations share the same dynamics and offer the same economic\n\n 6\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 12 of 30\n\n\n\n\nexposure, with one key difference: fixed-date futures expire on a specified date; perpetuals do not\n\nexpire. The expiration date ensures that the price of the future contract remains tethered to the\n\nmarket price of underlying commodity (the \u201cspot\u201d price). 6 Perpetual futures, by contrast, keep the\n\ncontract price tethered to the spot price via a \u201cfunding rate\u201d mechanism\u2014a periodic payment that\n\ntraders on one side of the contract make to traders on the other side. When the perpetual-future\n\nprice is higher than the spot price, the demand for \u201clong\u201d positions is artificially high\u2014so the\n\n\u201clong\u201d positions must pay the \u201cshort\u201d positions, which decreases the incentive of holding a \u201clong\u201d\n\nposition and forces the perpetual-future price down to the spot price. And when the perpetual-\n\nfuture price is below the spot price, the demand for \u201cshort\u201d positions is artificially high\u2014so\n\npayments flow the opposite direction and the perpetual-future price rises to the spot price. These\n\npayments often occur multiple times per day, which keeps the perpetual futures price in close sync\n\nwith the spot price.\n\n Perpetual futures have long been accessible to U.S. traders via offshore platforms, but the\n\nU.S. regulatory community has taken strides toward bringing these transactions onto U.S.-\n\nregulated exchanges where they can be subject to appropriate legal protections. In April 2025, the\n\nCommission sought public feedback on the issue, which prompted a number of comments from\n\nmarket participants. 7 Then in July 2025, the President\u2019s Working Group on Digital Asset Markets\n\nissued a report recommending that the Commission and the SEC permit various market\n\n\n\n 6\n This dynamic is called \u201cconvergence\u201d\u2014namely, that as the expiration date looms, the\nfutures price and the spot price converge due to the threat of arbitrage. For example, if the price\nof a corn future was less than the spot price of corn, then a trader could simply buy a corn future,\ndemand actual delivery of the corn, and immediately resell the corn at the market price for profit.\nBecause of that potentiality, futures prices track spot prices.\n 7\n See CFTC, Request for Comment on the Trading and Clearing of \u201cPerpetual\u201d Style\nDerivatives (Apr. 21, 2025), https://www.cftc.gov/media/12041/Perpetuals_RFC042125/\ndownload.\n\n 7\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 13 of 30\n\n\n\n\nparticipants to access perpetual contracts through regulated intermediaries. 8\n\n U.S. exchanges, moreover, created \u201cperpetual-style futures\u201d that aimed to replicate the\n\neconomics of true perpetual futures. For instance, Chicago Board Options Exchange (\u201cCboe\u201d)\n\noffers \u201ccontinuous futures,\u201d which are futures with expirations extending up to 10 years. 9 Because\n\nthe expiration is so distant, continuous futures use a \u201cdaily cash adjustment\u201d\u2014called a \u201cFunding\n\nAmount\u201d\u2014to \u201ckeep[] futures prices closely aligned with their respective underlying reference\n\nrates.\u201d 10 By doing so, these long-dated futures \u201cprovide access to a perpetual-style futures product\n\nin a U.S.-regulated, intermediated environment and eliminate the need for investors to roll\n\npositions regularly.\u201d 11 Coinbase and Bitnomial likewise offered \u201cperpetual-style futures [with]\n\nlong-dated expiration dates, including up to 25 years,\u201d whose \u201cfundamental mechanics . . . are\n\nidentical to those\u201d of a true perpetual. 12\n\n Against this backdrop, Kalshi\u2014a CFTC-registered DCM\u2014commenced efforts to list true\n\nperpetual futures in the United States, which culminated in a formal application under Commission\n\nRule 40.3 to list a perpetual future that references the spot price of bitcoin (the \u201cBTCPERP\n\ncontract\u201d). See Dkt. 1-4. In May, the Commission issued an Order approving the application.\n\nAfter explaining the contents of Kalshi\u2019s submission, Order at 1\u20135, the Commission found that\n\n\u201clisting the BTCPERP Contract or making the BTCPERP Contract available for clearing or trading\n\n\n 8\n President\u2019s Working Group on Digital Asset Markets, Strengthening American\nLeadership in Digital Financial Technology at 143 (July 30, 2025),\nhttps://www.whitehouse.gov/wpcontent/uploads/2025/07/Digital-Assets-Report-EO14178.pdf.\n 9\n Cboe Continuous Futures, https://www.cboe.com/tradable-products/cryptocurrency/\ncontinuous-futures/ (last visited July 14, 2026).\n 10\n Id.\n 11\n Id.\n 12\n CFTC Letter No. 26-19, No-Action Positions Regarding Removal of Expiration Dates\nfrom Existing Digital Commodity Perpetual-Style Futures Contracts (June 12, 2026),\nhttps://www.cftc.gov/csl/26-19/download.\n 8\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 14 of 30\n\n\n\n\nas a futures contract \u2013 a contract for sale of a commodity for future delivery \u2013 would not violate\n\nthe CEA or the Commission\u2019s regulations thereunder,\u201d Id. at 6. The Commission further explained\n\nhow the funding-rate mechanism would keep the perpetual price and spot price aligned, and why\n\n\u201ccharacteristics of the underlying bitcoin spot market would support the effective functioning of\n\nthe funding rate mechanism.\u201d Id. at 6\u20138. The Commission finally clarified that \u201cKalshi and other\n\nDCMs [could] list for trading, as futures contracts, the BTCPERP contract . . . and similarly\n\nstructured perpetual contracts that reference the spot price of bitcoin or other digital commodities,\u201d\n\nbut that permission did not \u201cextend to underlying asset classes other than digital commodities.\u201d\n\nId. at 8; see also CFTC Letter No. 26-19, supra n.12 (no-action relief allowing Coinbase and\n\nBitnomial to remove expiration dates from perpetual-style futures on digital commodities).\n\n The Commission concurrently issued a Policy Statement. 91 Fed. Reg. 33,160 (June 3,\n\n2026) (Dkt. 1-2). The Statement \u201cdoes not impose any obligation on any person, modify or\n\nsupersede any provision of the Commodity Exchange Act . . . or the Commission\u2019s regulations\n\nthereunder, create any right or benefit enforceable at law or in equity, and is not subject to the\n\nnotice-and-comment requirements of the Administrative Procedure Act.\u201d Id. at 33,161. It simply\n\nexpresses \u201cthe Commission\u2019s view that perpetual contracts that reference asset classes that are not\n\ncontemplated in the Order should be submitted for Commission review and approval pursuant to\n\nthe voluntary product approval process under Commission Regulation 40.3.\u201d Id.\n\n CME filed this lawsuit against the Commission challenging the Order and Policy\n\nStatement. Dkt. No. 1.\n\n\n\n\n 9\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 15 of 30\n\n\n\n\n LEGAL STANDARD\n\n \u201cThe plaintiff bears the burden of invoking the court\u2019s subject matter jurisdiction, including\n\nestablishing the elements of standing.\u201d Arpaio v. Obama, 797 F.3d 11, 19 (D.C. Cir. 2015).\n\nAlthough the Court \u201caccept[s] the well-pleaded factual allegations as true and draw[s] all\n\nreasonable inferences from those allegations . . . threadbare recitals of the elements of standing,\n\nsupported by mere conclusory statements, do not suffice.\u201d Id. (citation modified). The plaintiff\u2019s\n\n\u201callegations will bear closer scrutiny in resolving a 12(b)(1) motion than in resolving a 12(b)(6)\n\nmotion for failure to state a claim.\u201d Immigrant Advocs. Response Collaborative v. United States,\n\n2026 WL 746923, at *3 (D.D.C. Mar. 17, 2026). \u201c[A] court may consider materials outside the\n\npleadings to determine its jurisdiction, and that includes materials necessary to determine whether\n\nthe plaintiff has standing.\u201d Dkt. No. 29 at 2; see also Food & Water Watch, Inc. v. Vilsack, 808\n\nF.3d 905, 913 (D.C. Cir. 2015) (same).\n\n \u201cTo survive a motion to dismiss\u201d under Rule 12(b)(6), \u201ca complaint must contain sufficient\n\nfactual matter, accepted as true, to state a claim to relief that is plausible on its face.\u201d Hurd v.\n\nDistrict of Columbia, 864 F.3d 671, 678 (D.C. Cir. 2017) (cleaned up). A plaintiff must plead\n\n\u201cfactual content that allows the court to draw the reasonable inference that the defendant is liable\n\nfor the misconduct alleged.\u201d Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).\n\n ARGUMENT\n\nI. CME lacks standing to bring its claims\n\n Article III requires a plaintiff to demonstrate a \u201cconcrete, particularized, and actual or\n\nimminent\u201d injury that is \u201cfairly traceable\u201d to the defendant\u2019s \u201cchallenged action\u201d and can be\n\n\u201credressable by a favorable ruling.\u201d Clapper v. Amnesty Int\u2019l USA, 568 U.S. 398, 409 (2013)\n\n(internal citations omitted). CME lacks standing for two reasons. First, CME has suffered no\n\ninjury: there is no plausible allegation that CME\u2019s bottom line has been or will be affected by the\n\n 10\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 16 of 30\n\n\n\n\noffering of perpetual futures, and in any event, CME and its competitors are on identical footing\n\nbecause the Commission\u2019s Order and Policy Statement allow any DCM, including CME, to offer\n\nperpetual futures. Second, even if CME were harmed, a favorable decision would provide no\n\nredress because, even on CME\u2019s theory, perpetual contracts could be recertified as \u201cswaps\u201d rather\n\nthan \u201cfutures,\u201d leaving CME in virtually the same position it is right now. Because CME lacks\n\nstanding, the complaint should be dismissed for lack of subject-matter jurisdiction under Fed. R.\n\nCiv. P. 12(b)(1).\n\n A. There is no injury to CME\n\n CME does not allege that a Commission action requires it do so something, or forbids it\n\nfrom doing something, as APA lawsuits usually allege. Lujan v. Defenders of Wildlife, 504 U.S.\n\n555, 561 (1992) (explaining that \u201cthere is ordinarily little question\u201d of injury when \u201cthe plaintiff\n\nis himself an object of the action (or forgone action) at issue\u201d). Rather, CME\u2019s theory is that the\n\nOrder and the Policy Statement inflict competitive injury\u2014that is, \u201cbecause of unlawful conduct,\n\n[CME\u2019s] rivals enjoy a competitive advantage in the marketplace.\u201d Citizens for Resp. & Ethics in\n\nWash. v. Trump, 953 F.3d 178, 190 (2d Cir. 2019), vacated as moot sub. nom. Trump v. Citizens\n\nfor Resp. & Ethics in Wash., 592 U.S. 1233 (2021); Compl. \u00b6\u00b6 10, 29.\n\n Competitive-injury standing has two elements: (1) \u201ca plaintiff must show that the\n\nchallenged government action results in \u2018an actual or imminent increase in competition,\u2019\u201d and (2)\n\n\u201cthe plaintiff must also show that it is in fact \u2018a direct and current competitor\u2019 in that market, in\n\nwhich case the plaintiff\u2019s \u2018bottom line may be adversely affected by the challenged government\n\naction.\u2019\u201d Air Excursions LLC v. Yellen, 66 F.4th 272, 279\u201380 (D.C. Cir. 2023) (internal citations\n\nomitted). CME does not satisfy either of these elements: it has not alleged that its bottom line will\n\nbe adversely affected or that it faces any actual or imminent increase in competition.\n\n\n\n 11\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 17 of 30\n\n\n\n\n 1. CME fails to allege a financial injury to its bottom line\n\n For a plaintiff to show that its \u201cbottom line may be adversely affected by the challenged\n\ngovernment action,\u201d it \u201cmust make a concrete showing that it is in fact likely to suffer financial\n\ninjury as a result of the challenged action.\u201d KERM, Inc. v. FCC, 353 F.3d 57, 60\u201361 (D.C. Cir.\n\n2004); see also PSSI Glob. Servs., L.L.C. v. FCC, 983 F.3d 1, 11 (D.C. Cir. 2020) (requiring a\n\n\u201cconcrete showing that the Order is likely to cause [the plaintiff] a financial injury\u201d). Even if a\n\ncompetitor receives \u201cfavorable regulatory treatment\u201d and there is increased competition, the\n\nplaintiff still must \u201cidentify a[] specific harm . . . that will result as a matter of economic logic.\u201d\n\nPSSI Glob. Servs., 983 F.3d at 12. CME comes up short on the financial-injury prong for two\n\nindependent reasons: first, the complaint fails plausibly to allege an actual or imminent financial\n\ninjury, and second, CME\u2019s own public statements and trading data refute its threadbare allegations\n\nof injury.\n\n i. The complaint does not allege any concrete financial consequences that are likely to\n\nresult from the approval of perpetual futures. Instead, CME makes formulaic recitations that the\n\napproval of digital-asset perpetuals will \u201cdirectly compete with CME\u2019s products aimed at the same\n\ncustomer base,\u201d Compl. \u00b6 29, or that perpetual futures \u201care designed to draw away CME\u2019s\n\ncustomers who currently trade true Bitcoin and cryptocurrency futures,\u201d id. \u00b6 45. At most, those\n\nallegations go to the first element of competitor standing (\u201cactual or imminent increase in\n\ncompetition\u201d), not the second (\u201cthe plaintiff\u2019s \u2018bottom line may be adversely affected by the\n\nchallenged government action\u2019\u201d). Air Excursions, 66 F.4th at 279\u201380; see, e.g., PSSI, 983 F.3d\n\nat 11 (\u201cMoreover, even if the SSOs did directly compete with the LSOs, they made no concrete\n\nshowing that the Order is likely to cause them a financial injury.\u201d). If allegations of increased\n\ncompetition sufficed to give rise to standing, the financial-injury requirement would be surplusage.\n\n\n\n 12\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 18 of 30\n\n\n\n\n Courts have rejected this sort of threadbare ipse dixit as insufficient to establish a\n\ncompetitive injury. Iqbal, 556 U.S. at 681 (\u201c[B]are assertions\u201d of injury that \u201camount to nothing\n\nmore than a \u2018formulaic recitation of the elements\u2019\u201d are \u201cconclusory and not entitled to be assumed\n\ntrue\u201d). In PSSI Global Services, for instance, the plaintiffs asserted that \u201cpayments to [their\n\ncompetitors] will \u2018make the already strongest competitors even stronger,\u2019 give them \u2018much more\n\nflexibility when competing,\u2019 and allow them to \u2018corner niche markets.\u2019\u201d 983 F.3d at 11. \u201cThese\n\nstatements,\u201d the D.C. Circuit held, do not \u201cidentify any specific harm to the [plaintiffs] that will\n\nresult as a matter of economic logic.\u201d Id. at 12. Likewise, in KERM, the court of appeals held that\n\nthe plaintiff \u201cfail[ed] to establish standing on the basis of any competitive injury\u201d by \u201cvaguely\n\nassert[ing] only that it competes with\u201d another and \u201cserve[s] much of the same audience.\u201d 353\n\nF.3d at 61. CME\u2019s allegations are more of the same.\n\n To be sure, some forms of increased competition \u201charm competitors\u201d \u201cas a matter of\n\n\u2018economic logic,\u2019\u201d such as agency \u201corders permitting a new entrant into a fixed market\u201d or\n\n\u201callowing a rival to sell a fungible good at a lower price.\u201d PSSI Glob. Servs., 983 F.3d at 11. But\n\nit does not follow \u201cas a matter of \u2018economic logic\u2019\u201d that the existence of perpetual futures will\n\ncause financial harm to CME. Id. To the contrary, CME\u2019s theory of injury requires speculating\n\nabout a \u201cchain of events\u201d that \u201cdepends on the independent actions of third parties\u201d\u2014namely, that\n\nCME\u2019s customers will choose to stop trading CME\u2019s fixed-date futures on digital assets and will\n\ninstead trade perpetual futures on digital assets offered on other exchanges. New World Radio,\n\nInc. v. FCC, 294 F.3d 164, 172 (D.C. Cir. 2002). That chain of events can hardly be assumed, as\n\n\u201c[m]arkets vary in terms of whether increased competition will yield harm.\u201d Citizens for Resp. &\n\nEthics in Washington v. Trump, 971 F.3d 102, 108 (2d Cir. 2020) (Menashi, J., dissenting from\n\nthe denial of rehearing en banc); see Mackinac Ctr. for Pub. Pol\u2019y v. Cardona, 102 F.4th 343, 356\n\n\n\n 13\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 19 of 30\n\n\n\n\n(6th Cir. 2024) (no competitor standing where \u201cPlaintiffs\u2019 allegations regarding supply and\n\ndemand and the impact of financial incentives on third-part[ies] . . . are wholly speculative\u201d). CME\n\nmakes no allegations beyond its say-so that customers will necessarily move from its existing\n\nproducts to perpetual futures. And there is no reason to think that result would necessarily follow.\n\nThe derivatives market is not a zero-sum game\u2014new product offerings can increase the pie for\n\neveryone. See Coalition Greenwich, Drivers of derivatives markets growth in the year ahead (Q1\n\n2025) (explaining that \u201c[r]etail participation in the derivatives markets is increasing around the\n\nworld due to . . . new products\u201d and that \u201c[p]roduct innovation,\u201d including \u201cdigital asset contracts,\u201d\n\n\u201cis driving growth in institutional markets as well\u201d).\n\n ii. CME\u2019s failure to allege a financial injury notwithstanding, CME\u2019s own statements and\n\ndata confirm that the company has suffered no financial injury and is not likely to imminently\n\nsuffer one. 13 Nearly two months after the Commission issued the Order and Policy Statement,\n\nCME Group\u2019s Chairman and CEO stated on an earnings call that \u201c[p]erpetual futures . . . do not\n\nappeal to our core customers\u201d and that \u201c[p]erpetual futures are in no way substitutes for the\n\n\n\n\n 13\n This Court has already acknowledged in this case it may \u201cconsider materials outside the\npleadings \u2026 necessary to determine whether the plaintiff has standing.\u201d Dkt. No. 29 at 2. And\nelsewhere, it has held that \u201cparties may cite to publicly available documents and that the Court\nmay take judicial notice of such documents.\u201d Banner Health v. Burwell, 126 F. Supp. 3d 28, 61\n(D.D.C. 2015) (Kollar-Kotelly, J.), rev\u2019d in part on other grounds 867 F.3d 1323 (D.C. Cir. 2017);\nsee Fed. R. Evid. P. 201(b) (\u201cThe court may judicially notice a fact that is not subject to reasonable\ndispute because it \u2026 can be accurately and readily determined from sources whose accuracy\ncannot reasonably be questioned.\u201d).\n Indeed, CME has represented that \u201cthe Court\u2019s review would benefit from assessing [facts\nin] the record in evaluating Defendants\u2019 motion to dismiss,\u201d as it believes \u201c[t]he record will almost\ncertainly contain further evidence of CME\u2019s competitive injury.\u201d Dkt. No. 27 at 6. By the same\ntoken, the Court would \u201cbenefit from assessing\u201d CME\u2019s own publicly available data, which is\n\u201cevidence\u201d that CME lacks \u201ccompetitive injury.\u201d Id. \u201cAfter all, in the law, what is sauce for the\ngoose is normally sauce for the gander.\u201d Heffernan v. City of Paterson, 578 U.S. 266, 272 (2016).\n\n\n 14\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 20 of 30\n\n\n\n\ninstitutional hedging tools that these customers rely on.\u201d 14 Further: \u201cwe have not heard demand\n\nfrom our customers for these products.\u201d 15 So according to CME\u2019s own public statements\u2014and\n\ncontrary to its conclusory assertions in its complaint\u2014perpetual futures did not detract from its\n\nbusiness in the two months following the Commission\u2019s Order and are not expected to detract from\n\nits business any time soon.\n\n CME\u2019s assertions on its earnings call, rather than the allegations in its complaint, are\n\nbacked up by CME\u2019s own publicly available data. CME\u2019s data show that the exchange saw\n\nsignificantly increased trading volume in digital-asset futures immediately after the Commission\n\nissued the Order and Policy Statement on May 29:\n\n June 2026 Volume May 2026 Volume Percentage Change\n\n Bitcoin Futures 292,118 259,329 +12.6%\n\n Micro Bitcoin Futures 1,611,107 1,113,719 +44.7%\n\n Ether Futures 369,358 326,981 +13.0%\n\n Micro Ether Futures 960,484 735,326 +30.6%\n\n\nSee CME Group, CME Exchange Volume Report \u2013 Monthly (July 2, 2026), available for\n\ndownload at https://www.cmegroup.com/ftp/webmthly/; see also Compl. \u00b6\u00b6 35 (emphasizing\n\nCME\u2019s offering of futures contracts in \u201ccryptocurrencies like Bitcoin and Ether\u201d). That data tracks\n\nCME Group\u2019s Q2 \u201cCrypto Catch-Up\u201d report, which stated that the Group\u2019s \u201cCryptocurrency suite\n\ndemonstrated resilient momentum in Q2 2026, with [Average Daily Volume] rising 32% year-\n\nover-year to 250K contracts and average daily open interest (ADOI) holding steady at 216K\n\n\n\n\n 14\n CME Group Q2 2026 Earnings Introductory Script at 3 (July 22, 2026),\nhttps://investor.cmegroup.com/static-files/f03a4407-750b-4ce3-a3db-02d59b60b8a6.\n 15\n Id. at 4.\n 15\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 21 of 30\n\n\n\n\ncontracts.\u201d 16 Indeed, according to data from CME released on the date of the filing of this motion,\n\nCME\u2019s crypto futures continue to trade at higher volumes than they did before the Commisssion\u2019s\n\nOrder and Policy Statement.\n\n August 2026 Volume May 2026 Volume Percentage Change\n\n Bitcoin Futures 298,958 259,329 +15.3%\n\n Micro Bitcoin Futures 1,370,250 1,113,719 +23.0%\n\n Ether Futures 344,084 326,981 +5.2%\n\n Micro Ether Futures 787,603 735,326 +7.1%\n\n\nSee CME Group, CME Exchange Volume Report \u2013 Monthly (Sept. 2, 2026); CME Group, CME\n\nExchange Volume Report \u2013 Monthly (July 2, 2026), both available for download at\n\nhttps://www.cmegroup.com/ftp/webmthly/. If perpetual futures truly had an adverse effect on\n\nCME\u2019s dated futures, that surely would have appeared in the data three months in. But the data\n\nshows the opposite, and thus, CME cannot concretely show it has suffered, or will \u201clikely\u201d suffer,\n\nfinancial injury because of the Order and Policy Statement. PSSI Glob. Servs., 983 F.3d at 11.\n\n There is more. Although perpetual futures are new to U.S.-regulated exchanges, perpetual\n\nfutures on offshore exchanges have long been available to U.S. traders, including CME\u2019s\n\ncustomers. Not only that, but perpetual-style futures with long-dated expiration dates have also\n\ntraded on U.S. exchanges for some time. CME\u2019s CEO discussed that on the earnings call, too:\n\n Crypto perpetuals are not new, and existed before we even launched our crypto\n futures complex. We have built that business over the last nine years because our\n futures fill a market need that was not met by traditional crypto products, including\n perpetuals. Our crypto futures volume is up over 7-fold in the past 3 years, despite\n the existence of crypto perpetuals.\n\n\n 16\n See CME Group, Crypto Catch-Up | Q2 2026 (July 14, 2026), https://www.cmegroup.\ncom/newsletters/quarterly-cryptocurrencies-report/2026-q2-cryptocurrency-highlights.html.\n 16\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 22 of 30\n\n\n\n\nCME Group Q2 2026 Earnings, supra n.14 at 4 (emphasis added). If CME\u2019s crypto futures have\n\nhistorically thrived despite competition from perpetual futures, it does not follow \u201cas a matter of\n\neconomic logic\u201d that it will suddenly face a financial setback from perpetual futures. PSSI, 983\n\nF.3d at 12.\n\n In short, CME has not alleged, and cannot plausibly allege, that it suffered a financial injury\n\nfrom the CFTC\u2019s authorization of perpetual futures contracts. CME therefore lacks standing.\n\n 2. CME fails to allege actual or imminent increase in competition\n\n The complaint also fails to plausibly allege that CME will suffer an increase in competition\n\nas a result of the challenged actions. Critically, the Commission did not simply allow Kalshi to\n\nlist perpetual futures for trading; it clarified that any DCM\u2014including CME\u2014can offer perpetual\n\nfutures in digital commodities for trading. The basis of competitor standing, however, is that \u201ca\n\ndefendant\u2019s actions benefitted a plaintiff\u2019s competitors, and thereby caused the plaintiff\u2019s\n\nsubsequent disadvantage\u201d\u2014not that the defendant treated the plaintiff and its competitor equally.\n\nFulani v. Brady, 935 F.2d 1324, 1327 (D.C. Cir. 1991) (emphasis added).\n\n Thus, to the extent CME\u2019s customers substitute toward perpetual futures over futures with\n\nfixed expirations (which apparently is not occurring, supra 14\u201317), CME is injured only if it\n\nchooses not to offer perpetual futures alongside its futures with fixed expirations. That would be\n\na \u201cself-inflicted harm,\u201d which \u201cdoesn\u2019t satisfy the basic requirements for standing.\u201d National Fam.\n\nPlan. & Reprod. Health Ass\u2019n, Inc. v. Gonzales, 468 F.3d 826, 831 (D.C. Cir. 2006). And it\n\ncertainly does not satisfy the requirements for competitor standing. As the D.C. Circuit has\n\nexplained, even an agency action that \u201ccreates a skewed playing field\u201d \u201cdoes not confer competitor\n\nstanding.\u201d Air Excursions, 66 F.4th at 280 (citation modified); see also PSSI, 983 F.3d at 11\n\n(\u201cfavorable tax treatment\u201d or \u201cfavorable regulatory treatment\u201d that \u201chas created an \u2018unfair\n\n\n\n 17\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 23 of 30\n\n\n\n\ncompetitive atmosphere\u2019\u201d does not \u201cestablish competitor standing\u201d). The Commission\u2019s Order\n\nand Policy Statement do not even do that: again, the Commission has created a level playing field\n\nthat allows all DCMs to list perpetuals on digital assets.\n\n CME, self-described as \u201cthe world\u2019s leading derivatives marketplace\u201d which \u201coffer[s] the\n\nwidest range of global benchmark products across all major asset classes,\u201d would be well-\n\npositioned to list perpetual futures based on the Order and Policy Statement. See CME Group,\n\n\u201cAbout Us,\u201d https://www.cmegroup.com/company/about-us.html. Again, CME\u2019s CEO recently\n\nacknowledged this:\n\n We have the full technical and operational capabilities to launch perpetual futures.\n In fact, we have contract specifications and are prepared to bring these products to\n market should evolving demand or structural shifts make it appropriate to do so.\n However, we have not heard demand from our customers for these products.\n\nCME Group Q2 2026 Earnings, supra n.14 at 3\u20134. That should be the ball game. According to\n\nCME, CME\u2019s customers do not want to buy perpetual futures\u2014so there is no current injury. See\n\nsupra 14\u201315. And if customers begin to demand perpetual futures, CME has the capability and\n\nwillingness to meet the demand. If CME loses business because customers eventually substitute\n\ntoward perpetuals that it chooses not to list, that would be a problem entirely of CME\u2019s own\n\nmaking.\n\n The complaint, to be sure, makes formulaic recitations of increased competition. Compl.\n\n\u00b6 43 (\u201cThe Order enables Kalshi to enter the market for cryptocurrency futures and to compete\u2014\n\non an unfair and unlawful basis\u2014with CME.\u201d); id. \u00b6 46 (alleging that Kalshi\u2019s perpetuals \u201care\n\ndesigned to compete with CME\u2019s retail futures products\u201d). But even if there is potential for\n\ncompetition, CME\u2019s own statements make clear that it is not facing actual competition. E.g., CME\n\nGroup Q2 2026 Earnings, supra n.14 at 3 (\u201cPerpetual futures are in no way substitutes for the\n\ninstitutional hedging tools that these customers rely on.\u201d); id. at 4 (\u201cOur crypto futures volume is\n\n\n 18\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 24 of 30\n\n\n\n\nup over 7-fold in the past 3 years, despite the existence of crypto perpetuals.\u201d). And again, CME\n\nignores that it could simply offer perpetual futures itself; any injury would stem from CME\u2019s\n\ndecision.\n\n Nor do the Commission\u2019s Order or Policy Statement resemble other agency actions that\n\nhave been held to trigger competitor standing. \u201cAgency action may increase competition, for\n\nexample, if it allows new entrants into a fixed regulated market.\u201d Air Excursions, 66 F.4th at 280.\n\nThe Commission\u2019s Order and Policy Statement do not allow any new entrants into the derivatives\n\nmarket; they allow all existing DCMs to expand their product offerings to include perpetual futures\n\ncontracts. Next, agency action that \u201clifts price controls on a firm\u2019s competitor and therefore\n\npermits \u2018price competition\u2019 that would not otherwise occur\u201d can trigger competitor standing. Id.;\n\nsee, e.g., Louisiana Energy & Power Auth. v. FERC, 141 F.3d 364, 366\u201367 (D.C. Cir. 1998) (utility\n\nhad standing to challenge FERC order allowing competitor to sell electric energy at lower\n\nrates). But CME makes no allegation that there will be any \u201cprice competition\u201d between perpetual\n\nfutures and other futures. To the contrary, the two products serve different customer needs: fixed-\n\nexpiration futures will appeal more to customers that seek to hedge or speculate on the price of an\n\nasset at a particular future date, while perpetual futures will appeal more to customers whose\n\ntrading strategy is not tied to a particular date. That is not \u201cprice competition.\u201d Air Excursions,\n\n66 F.4th at 280. And finally, competitor standing applies if an agency \u201creimburses a firm\u2019s\n\ncompetitor for selling its product or service at discounted rates\u201d\u2014also not true here. Id.\n\n B. CME\u2019s alleged injury would not be redressed by a favorable decision\n\n Even if CME were injured, a favorable decision from this Court would not provide any\n\nredress because it would not \u201clikely alleviate the particularized injury alleged.\u201d County of\n\nDelaware v. Department of Transp., 554 F.3d 143, 149 (D.C. Cir. 2009). Critically, CME does\n\nnot allege that the Commission lacks authority to approve perpetual futures\u2014only that the\n\n 19\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 25 of 30\n\n\n\n\nCommission was required to reapprove these contracts as swaps. See, e.g., Compl. \u00b6 191\n\n(\u201cKalshi\u2019s Bitcoin perpetual meets the CEA\u2019s definition of a swap; it is not a \u2018contract of sale of a\n\ncommodity for future delivery\u2019 under that statute.\u201d); id. \u00b6 192 (\u201cPerpetual contracts fit the CEA\u2019s\n\nstatutory definition of a \u2018swap\u2019 hand in glove . . . .\u201d).\n\n The upshot is that, if CME were to prevail in this lawsuit, the perpetual futures approved\n\nby the Commission\u2019s Order could still trade on U.S. exchanges\u2014just under the \u201cswap\u201d label rather\n\nthan the \u201cfuture\u201d label. DCMs that list perpetuals could make that switch almost instantly. Under\n\nthe CEA and the Commission\u2019s rules, DCMs can offer a product after certifying to the Commission\n\nthat the product complies with the Act. 7 U.S.C. \u00a7 7a-2(c)(1); 17 C.F.R. \u00a7 40.2(a). And according\n\nto CME, a self-certification to list perpetual futures as swaps would comply with the Act. Compl.\n\n\u00b6 11. So Kalshi and any other DCM could simply self-certify its perpetual contracts as swaps in\n\ncompliance with the Court\u2019s order. Cf. 77 Fed. Reg. at 48,303 (\u201cIf a DCM has a view that a\n\nparticular product is a futures contract, it may self-certify the contract consistent with that view.\u201d).\n\nIn that circumstance, CME would still have to \u201ccompete\u201d against perpetual contracts. Because \u201ca\n\nfavorable opinion of the court\u201d would not \u201cremove the competing [products] from the market,\n\nredressability\u201d is not satisfied. Honeywell Int\u2019l Inc. v. EPA, 374 F.3d 1363, 1369\u201370 (D.C. Cir.\n\n2004) (per curiam), withdrawn in part on other grounds, 393 F.3d 1315 (D.C. Cir. 2005).\n\n To be sure, there are regulatory and tax differences between swaps and futures. See Compl.\n\n\u00b6\u00b6 106\u201310. But CME does not make any allegation that its competitive prospects would likely\n\nchange if perpetuals were subject to the regulatory and tax regime for swaps rather than futures.\n\nEven if it had, those allegations would be utterly speculative. Clapper, 568 U.S. at 410 (no\n\nstanding based on \u201ca speculative chain of possibilities\u201d); Friends of Animals v. Ashe, 174 F. Supp.\n\n3d 20, 28 (D.D.C. 2016) (it must be \u201clikely, and not merely speculative, that the Court can redress\n\n\n\n 20\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 26 of 30\n\n\n\n\nthe injury\u201d). It would require a prediction about \u201chow regulated third parties not before the court\n\nwill act in response to . . . judicial relief, which makes it substantially more difficult for [CME] to\n\nsatisfy their burden of establishing standing.\u201d ModernWest Longmont, LLC v. FAA, 177 F.4th\n\n290, 296 (D.C. Cir. 2026). Would CME\u2019s other futures offerings fare better if they competed\n\nagainst \u201cperpetual swaps\u201d that required a trader to post five days of margin, rather than competing\n\nagainst \u201cperpetual futures\u201d that require a trader to post one day of margin? Compl. \u00b6 107. Or if\n\nCME\u2019s futures competed against \u201cperpetual swaps\u201d taxed as ordinary income as opposed to\n\n\u201cperpetual futures\u201d taxed partially as ordinary income and partially as capital gains? Compl. \u00b6 110.\n\nCME has not alleged an answer to these questions, and even if it had, it would be sheer speculation.\n\n Alternately, if CME were to establish that perpetual futures are actually swaps, DCMs\n\ncould respond simply by converting perpetual offerings to perpetual-style futures with long-dated\n\nexpirations, as several offered before the Commission\u2019s Order and Policy Statement (and which\n\nprominent exchange Cboe still offers). Supra 8. The \u201cfundamental mechanics\u201d of these perpetual-\n\nstyle futures \u201care identical to those\u201d of a true perpetual, \u201cincluding relying on a periodic funding\n\nrate mechanism, rather than a fixed expiration date, that is designed to maintain relative price\n\nparity with the underlying asset\u2019s spot price.\u201d 17 In that scenario, CME would face an identical\n\ncompetitive situation to what it faces now: perpetual-style contracts that receive the regulatory and\n\ntax treatment associated with futures.\n\n In sum, since there is no \u201c\u2018predictable chain of events\u2019 that would likely result from judicial\n\nrelief and redress the plaintiff\u2019s injury,\u201d CME fails the redressability prong of Article III standing.\n\nDiamond Alt. Energy, LLC v. EPA, 606 U.S. 100, 121 (2025).\n\n\n\n\n 17\n CFTC Letter No. 26-19, supra n.12.\n 21\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 27 of 30\n\n\n\n\nII. CME\u2019s claim is not in the \u201czone of interests\u201d protected by the CEA.\n\n The Court should also dismiss because CME\u2019s claims are not within the \u201czone of interests\u201d\n\nthat the CEA is intended to protect. The \u201czone of interests\u201d analysis examines \u201cwhether a\n\nlegislatively conferred cause of action encompasses a particular plaintiff\u2019s claim.\u201d Lexmark Int\u2019l\n\nv. Static Control Components, Inc., 572 U.S. 118, 127 (2014). Although the plaintiff need not\n\nshow \u201cthat the statute directly regulate[s] [him],\u201d it must prove that its \u201cinterests are such that they\n\nin practice can be expected to police the interests that the statute protects.\u201d CSL Plasma Inc. v.\n\nU.S. Customs & Border Prot., 33 F.4th 584, 589 (D.C. Cir. 2022) (quoting Amgen Inc. v. Smith,\n\n357 F.3d 103, 109 (D.C. Cir. 2004)). If the \u201cplaintiff\u2019s interests are so marginally related to or\n\ninconsistent with the purposes implicit in the statute that it cannot reasonably be assumed that\n\nCongress authorized that plaintiff to sue,\u201d then the claim is subject to dismissal under Fed. R. Civ.\n\nP. 12(b)(6). Id. (quoting Lexmark, 572 U.S. at 130). Where, as here, \u201ca claim arises under the\n\nAPA, the zone of interests test requires considering the \u2018substantive provisions\u2019 of the underlying\n\nstatute, the \u2018alleged violations of which serve as the gravamen of the complaint.\u2019\u201d Id. (quoting\n\nBennett v. Spear, 520 U.S. 154, 175\u201376 (1997)).\n\n For example, in Air Courier Conference v. American Postal Workers Union, a union of\n\npostal employees challenged USPS\u2019s suspension of the Private Express Statutes, which enabled\n\nprivate couriers to engage in international remailing. 498 U.S. 517, 519\u201320 (1991). While the\n\ndistrict court held that the employees suffered an injury in fact \u201cbecause increased competition\n\nthrough international remailing services might have an adverse effect on employment\n\nopportunities of postal workers,\u201d the Supreme Court held that the PES were not enacted \u201cto protect\n\njobs with the Postal Service\u201d or were otherwise \u201cintended for the benefit of postal workers.\u201d Id.\n\nat 524\u201326. Rather, the PES were \u201cthe means to achieve national integration [of mail delivery] and\n\nto ensure that all areas of the Nation were equally served by the Postal Service.\u201d Id. at 527.\n\n 22\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 28 of 30\n\n\n\n\n Likewise here, even if \u201cincreased competition\u201d causes an injury in fact to CME, there is no\n\nindication that Congress sought to \u201cprotect\u201d one DCM\u2019s interest in the contract classifications of\n\nanother DCM. Id. at 524\u201325. The two key provisions that form the \u201cgravamen\u201d of CME\u2019s\n\ncomplaint are 7 U.S.C. \u00a7 7a-2(c) and \u00a7 1a(47). CSL Plasma, 33 F.4th at 589; see Compl. \u00b6\u00b6 76,\n\n190. Section 7a-2(c) establishes a process by which DCMs can self-certify their contracts, and\n\nunless the Commission intervenes, the contracts can be listed the very next day. 7 U.S.C. \u00a7 7a-\n\n2(c)(1), (3). That deliberate, self-regulatory design would be undermined if DCMs could use\n\nfederal litigation to slow a competitor\u2019s innovation by challenging whether the competitor properly\n\ncertified a contract as a \u201cswap\u201d rather than as a \u201cfuture.\u201d See 7 U.S.C. \u00a7 5(b) (\u201cpurpose\u201d of the\n\nCEA is to create \u201ca system of effective self-regulation . . . under the oversight of the Commission\u201d\n\n(emphasis added)).\n\n Section 1a(47) also does not suggest that CME has a right to sue for its competitor\u2019s\n\nclassification decisions. That language was added to the CEA in the 2010 Dodd-Frank Act. Before\n\nDodd-Frank, the Commission had comprehensive jurisdiction over futures, but limited jurisdiction\n\nover swaps. Dodd-Frank did away with that bifurcation, enacting a broad \u201cswap\u201d definition and\n\nsubjecting swap transactions to the Commission\u2019s exclusive jurisdiction. 7 U.S.C.\n\n\u00a7\u00a7 1a(47), 2(a)(1)(A). While the \u201cswap\u201d definition excludes \u201cfutures,\u201d id. \u00a7 1a(47)(B)(i), nothing\n\nin the CEA suggests that Congress contemplated one DCM challenging another DCM\u2019s\n\nclassification of a \u201cfuture\u201d as a \u201cswap\u201d (or vice versa). To the contrary, as CME stated in public\n\ncomments to the Commission: \u201cDodd-Frank provisions [] now codify equivalent regulatory\n\ntreatment for futures and \u2018economically equivalent\u2019 swaps,\u201d which \u201cmakes it extremely difficult,\n\nif not impossible, to separately define and categorize economically equivalent swaps and\n\n\n\n\n 23\n\f Case 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 29 of 30\n\n\n\n\nfutures.\u201d 18 The upshot, according to CME, is that Dodd-Frank \u201cpreserves \u2018customer choice,\u2019\u201d\n\nsuch that \u201cmarket participants retain the option to trade products as either \u2018futures\u2019 or \u2018swaps.\u2019\u201d 19\n\nSo nothing about the swap definition suggests that Congress meant to greenlight lawsuits like this\n\none.\n\n More broadly, a central purpose of the CEA\u2019s regulatory framework is to protect market\n\nintegrity by \u201cdeter[ring] and prevent[ing] price manipulation or any other distortions,\u201d \u201cfraudulent\n\nor other abusive sales,\u201d and \u201cmisuses of customer assets.\u201d 7 U.S.C. \u00a7 5(b); see, e.g., CFTC v. R.J.\n\nFitzgerald & Co., 310 F.3d 1321, 1329 (11th Cir. 2002) (\u201c[T]he CEA is a remedial statute that\n\nserves the crucial purpose of protecting the innocent individual investor\u2014who may know little\n\nabout the intricacies and complexities of the commodities market\u2014from being misled or\n\ndeceived.\u201d). Apart from that, the CEA seeks \u201cto promote responsible innovation and fair\n\ncompetition among boards of trade, or markets and market participants.\u201d 7 U.S.C. \u00a7 5(b)\n\n(emphasis added). CME\u2019s lawsuit\u2014which is designed to stifle innovation and competition among\n\nboards of trade\u2014turns that purpose on its head. Thus, CME\u2019s claims do not fall within the zone\n\nof interests protected by the CEA and are accordingly subject to dismissal.\n\n CONCLUSION\n\n The Court should dismiss the complaint.\n\n\n\n Dated: September 2, 2026 Respectfully Submitted,\n\n /s/ M. Jordan Minot\n M. Jordan Minot (DC Bar No. 1722554)\n\n\n\n\n 18\n Letter from Craig S. Donohue, supra n.5.\n 19\n Id. at 4.\n 24\n\fCase 1:26-cv-02157-CKK Document 30-1 Filed 09/02/26 Page 30 of 30\n\n\n\n\n TYLER S. BADGLEY\n General Counsel\n M. JORDAN MINOT\n Deputy General Counsel\n ANDREW J. WEISBERG\n Senior Assistant General Counsel\n HENRY J. DICKMAN\n Senior Assistant General Counsel\n ANNE W. STUKES\n Senior Assistant General Counsel\n CARLIN METZGER\n Senior Assistant General Counsel\n MARGARET P. AISENBREY\n Senior Assistant General Counsel\n\n U.S. Commodity Futures Trading Commission\n Three Lafayette Centre\n 1155 21st Street, NW\n Washington, DC 20581\n Tel: (202) 209-1087\n Fax: (202) 418-5567\n tbadgley@cftc.gov\n jminot@cftc.gov\n aweisberg@cftc.gov\n hdickman@cftc.gov\n astukes@cftc.gov\n cmetzger@cftc.gov\n maisenbrey@cftc.gov\n\n Attorneys for Defendants\n\n\n\n\n 25\n\f","ocr_status":2,"date_upload":"2026-09-03T04:12:45.828046-07:00","document_number":"30","attachment_number":1,"pacer_doc_id":"045012320939","is_available":true,"is_free_on_pacer":null,"is_sealed":false,"document_type":2,"description":"Memorandum in Support","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/492316594/","id":492316594,"tags":[],"absolute_url":"/docket/73500937/30/2/chicago-mercantile-exchange-inc-v-selig/","date_created":"2026-09-02T15:45:48.197034-07:00","date_modified":"2026-09-09T06:54:49.500783-07:00","sha1":"39b7333cf8e50844a7ccef600935ebe5f7189f80","page_count":1,"file_size":230052,"filepath_local":"recap/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.30.2.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.dcd.293632/gov.uscourts.dcd.293632.30.2.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 1:26-cv-02157-CKK Document 30-2 Filed 09/02/26 Page 1 of 1\n\n\n\n\n UNITED STATES DISTRICT COURT\n FOR THE DISTRICT OF COLUMBIA\n\n CHICAGO MERCANTILE EXCHANGE\n INC.,\n\n Plaintiff,\n\n v. Case No. 1:26-cv-02157\n\n MICHAEL S. SELIG, in his official capacity as\n Chairman of the Commodity Futures Trading\n Commission; COMMODITY FUTURES\n TRADING COMMISSION,\n\n Defendants.\n\n\n [PROPOSED] ORDER\n\n Upon consideration of Defendants\u2019 Motion to Dismiss, as well as the briefing in support\n\nof and in opposition to that Motion, the Court concludes that dismissal is warranted. Accordingly,\n\nit is hereby ORDERED that Defendants\u2019 Motion to Dismiss is granted.\n\n\n _______________________________________\n\n HONORABLE COLLEEN KOLLAR-KOTELLY\n UNITED STATES DISTRICT JUDGE\n\f","ocr_status":2,"date_upload":"2026-09-03T04:12:50.444302-07:00","document_number":"30","attachment_number":2,"pacer_doc_id":"045012320940","is_available":true,"is_free_on_pacer":null,"is_sealed":false,"document_type":2,"description":"Text of Proposed Order","acms_document_guid":""}],"date_created":"2026-09-02T15:45:45.517798-07:00","date_modified":"2026-09-02T20:23:02.876847-07:00","date_filed":"2026-09-02","time_filed":"18:44:54","entry_number":30,"recap_sequence_number":"2026-09-02.001","pacer_sequence_number":104,"description":"MOTION to Dismiss for Lack of Jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1), MOTION to Dismiss for failure to state a claim by COMMODITY FUTURES TRADING COMMISSION, MICHAEL S. SELIG. (Attachments: # 1 Memorandum in Support, # 2 Text of Proposed Order)(Minot, Martin) (Entered: 09/02/2026)","tags":[]}],"entries_total":"https://www.courtlistener.com/api/rest/v4/docket-entries/?count=on&docket=73500937&page_size=40"}