Wall Street Sued to Kill US Stock Perpetuals Hours After Approval: 4 Exchanges, $5B Offshore Market, and 6.7x Leverage at Stake

Wall Street sued to kill American stock perpetuals on the very day the US regulator cleared them. On November 3, 2026, the Commodity Futures Trading Commission (CFTC) said perpetual futures on individual US stocks could begin trading on qualifying regulated exchanges — and within hours, a new industry group backed by Cboe and Citadel Securities filed a federal lawsuit asking a Manhattan court to vacate that approval and freeze trading while the case runs. At stake is a market that already moves about $5 billion a day offshore, a product with no expiry date, and leverage that can reach roughly 6.7 times in one proposed design. This is not a quiet technical dispute. It is a fight over who controls the next version of the US stock market — and whether crypto's most popular trading product becomes a mainstream American one.

The lawsuit does not mean stock perpetuals are dead, and the approval does not mean you can trade them in your brokerage app today. As of November 4, no court order freezing the approval had been reported, and the CFTC had named no first live contract and no launch date. What happened on November 3 is better understood as the starting gun in a legal race: the regulator opened the gate, Wall Street's biggest incumbents ran to court to close it, and four exchanges — Kalshi, Coinbase Derivatives, Bitnomial and Crypto.com's North American Derivatives Exchange — are waiting to see whether the gate stays open.

This article explains what was approved, what the lawsuit actually argues, how a stock perpetual differs from owning a stock, why the $5 billion offshore number matters, and what traders should watch next — including the five checks that decide whether this product ever reaches your account.

What Happened on November 3, in 90 Seconds

CFTC Chairman Michael S. Selig announced that perpetual futures on individual equity securities — known as equity perps — can begin trading on qualifying US exchanges. The contracts were treated as security futures products under the Commodity Futures Modernization Act and deemed approved under CFTC Regulation 40.3, which allows certain rule filings to take effect after a review period without a separate commission vote.

Crucially, the CFTC said these are not CFTC-only products. Eligible venues must be designated contract markets that also hold Securities and Exchange Commission (SEC) notice registration for trading security futures. In plain terms, the products sit under both regulators' frameworks at once — a dual-registration condition that matters enormously to the lawsuit, because the plaintiffs argue the contracts belong exclusively to the SEC.

Selig framed the move as bringing trading home. Americans, he said, should not be forced to turn to offshore and often unregulated venues to trade perpetual futures on individual stocks. That sentence is the whole policy argument in one line: the demand already exists, it is currently served overseas, and a regulated US route is safer than pushing traders offshore.

The response was immediate. The Capital Markets Alliance — a group whose members include Cboe, Citadel Securities and the Healthy Markets Association, according to Reuters reporting — filed suit in federal court in Manhattan the same day. It asked the court to vacate the CFTC approvals, declare the contracts security-based swaps under SEC jurisdiction, and bar the CFTC from giving the approvals effect while the case runs. A CFTC spokesperson called the lawsuit troubling interference with CFTC-regulated markets, saying markets should be governed by law, not litigation campaigns intended to block innovation.

What Is a Stock Perpetual, Exactly?

A perpetual future is a derivative contract that tracks the price of something — here, an individual stock — without a fixed expiry date. Traditional futures expire: you must roll the contract into the next month or settle it. A perpetual never expires. Instead, it stays close to the underlying share price through funding payments exchanged between long and short traders at regular intervals.

When the contract trades above the share price, longs typically pay shorts; when it trades below, shorts pay longs. That payment mechanism is the engine that keeps the derivative anchored to the real stock. In one proposed design described in a Coinbase Derivatives filing, funding is calculated hourly and settled in cash through margin accounts, with a rate of up to 0.10% per hour in some conditions. That figure sounds small until you annualise it — which is exactly why funding costs, not just price direction, decide whether a perpetual trade makes money over weeks rather than hours.

The proposed US designs are cash-settled. That means no shares change hands. You never own Apple, Tesla or Nvidia stock through the contract, you never receive a dividend as a shareholder, and you never get a vote. You get price exposure — long or short — with leverage, around the clock in some proposed designs. Coinbase's filing describes trading hours from 8 p.m. Eastern on Sunday to 5 p.m. Eastern on Friday, with a leverage cap of approximately 6.7 times under the 15% minimum margin that applies to security futures. In other words, a $1,500 margin deposit could control roughly $10,000 of stock exposure — and a 15% move against you could wipe out that deposit.

The Lawsuit: What the Capital Markets Alliance Actually Argues

The lawsuit turns on a classification question that sounds boring and decides everything: are single-stock perpetuals security futures products, or security-based swaps?

The CFTC says the former. Security futures products fall under a joint CFTC-SEC framework, and the contracts were deemed approved under Regulation 40.3 after the filings completed their review period. The exchanges that filed — Kalshi first, followed by Coinbase Derivatives, Bitnomial and Crypto.com's exchange — had submitted their proposals in mid-to-late September, and the 45-day review window had run.

The Capital Markets Alliance says the latter. Security-based swaps, it argues, fall under the SEC's exclusive jurisdiction and are kept away from retail investors. Its complaint, as reported by Reuters, says the CFTC sidestepped laws enacted by Congress and invited a parallel, synthetic market in US stocks to grow outside the SEC's exclusive jurisdiction. It also argues the CFTC broke administrative law by not adequately explaining its decision.

The $5 Billion Number That Explains Why Everyone Cares

Why would Cboe and Citadel Securities — giants of the existing market — sue the same day? Follow the offshore money. Hyperliquid, the leading offshore venue for stock perpetuals, has a builder market, Trade.xyz, that reported $4.99 billion in volume over 24 hours across 142 contracts on stocks, indexes and commodities, with $4.42 billion in open interest, according to coverage of the lawsuit. Hyperliquid's own token, HYPE, dipped to $81.01 early on November 4 and recovered to $85.93 by 08:00 UTC, up 2.8% in 24 hours — a reminder that the offshore market did not pause for the lawsuit.

That $5 billion daily figure is the prize and the threat at once. For the CFTC, it proves demand that could be served onshore, under US rules, with US consumer protections. For incumbents, it shows a parallel market already operating at scale — one that could, if legitimised onshore, divert volume from traditional exchanges, options markets and the market-making businesses that dominate them. For crypto traders, it shows the product works: perpetuals on stocks are not a theory, they are a liquid market that US traders currently reach only by going offshore.

The Four Exchanges Waiting at the Gate

Only four platforms had completed the full application process when the CFTC acted, and each tells a different part of the story:

• Kalshi leads on prediction markets: Kalshi filed first, on September 18, after securing approval for its first bitcoin perpetual in May. It initially plans to cover 58 popular US equity contracts including Apple, Tesla and Nvidia, according to coverage of its filing — the broadest opening menu reported so far.
• Coinbase brings the crypto exchange: Coinbase Derivatives also filed on September 18, proposing cash-settled contracts with hourly funding, near-24-hour trading and roughly 6.7 times maximum leverage. It is the most detailed public design, and the clearest bridge between crypto perpetuals and US equities.
• Bitnomial brings Kraken's infrastructure: Bitnomial, the derivatives exchange under Kraken's parent company Payward, filed on September 18 as well. Its presence shows this is not a single-company push but a coordinated move by crypto-native venues.
• Crypto.com brings the retail funnel: Crypto.com's North American Derivatives Exchange, formerly Nadex and now operating as OG.com Markets, filed on September 24 after SEC confirmation of its Form 1-N filing. Robinhood has designated OG.com as its clearing infrastructure partner for prediction markets, which gives this venue a potential path to millions of retail accounts.

Getting a ticket, however, is not the same as opening for trading. Exchanges must still meet listing standards on float size, trading volume, pricing reliability and resistance to manipulation for each underlying stock, and the CFTC statement named no first live contract or launch date. Treat any claim that a specific app already offers stock perps today with scepticism until that venue confirms a live listing.

Stock Perp vs Owning the Stock vs Stock Options: The Honest Comparison

Feature	Owning the stock	Stock perpetual (proposed US design)	Stock options
Expiry	None	None — funding keeps price anchored	Fixed expiry date
Ownership	Yes — dividends and votes	No — cash-settled price exposure only	No — right to buy or sell
Leverage	Margin up to broker limits	Up to about 6.7x in Coinbase filing	Built in, varies widely
Trading hours	Market hours plus extended sessions	Proposed near-24-hour, Sunday to Friday	Market hours
Main ongoing cost	None beyond opportunity cost	Funding payments, hourly in one design	Time decay (theta)
Biggest risk	Price falls	Liquidation on leveraged moves plus funding bleed	Contract expires worthless

Timeline: How Crypto's Product Reached the US Stock Market

• May 29, 2026 — the bitcoin precedent: The CFTC approved KalshiEX's bitcoin-linked perpetual contract, establishing the domestic regulated route for perpetuals.
• June 2026 — the first court fight: The Chicago Mercantile Exchange sued the CFTC over its decision to allow Kalshi and Coinbase to offer perpetuals based on digital assets — an early warning that incumbents would litigate this model.
• September 18, 2026 — the filings land: Kalshi, Coinbase Derivatives and Bitnomial filed proposals for equity perpetual contracts; Crypto.com's exchange followed on September 24.
• November 2, 2026 — the warning shot: The Securities Industry and Financial Markets Association (SIFMA) called for broader scrutiny before launch, citing effects on liquidity, price discovery and cross-market manipulation.
• November 3, 2026 — approval and lawsuit, same day: Chairman Selig announced equity perpetuals could begin trading on qualifying dual-registered exchanges; the Capital Markets Alliance sued in Manhattan hours later seeking to vacate the approvals and freeze trading.
• November 4, 2026 — no freeze reported: Coverage reported a request for emergency relief but no court order granting it. The next decision to watch is the judge's ruling on that request.

What Most People Get Wrong About This Fight

First, this is not a fight about whether perpetuals are risky. Everyone agrees leveraged derivatives are risky. The fight is about which regulator gets to decide, and which process applies. A product can be risky and still be legal under one regulator's framework while being barred under another's — and the lawsuit exploits exactly that gap.

Second, this is not a crypto-versus-Wall-Street story in the simple sense. Cboe lists crypto products. Citadel Securities trades crypto. The plaintiffs are not anti-crypto; they are defending a market structure in which they are dominant against a new structure in which crypto-native venues have the advantage. The dividing line is business model, not ideology.

Third, approval does not equal availability. The CFTC opened a route, not a shop. Until an exchange announces a live contract, a listing date and a broker rollout, retail traders cannot act on this news — and any platform claiming otherwise should be treated as marketing, not fact.

5 Checks Before You Ever Trade a Stock Perpetual

If and when these products go live, run these five checks first — they are the difference between a calculated trade and an expensive lesson:

• Check the funding rate history first: A contract that costs 0.10% per hour to hold can cost more than 2% per day. Never open a multi-day position without knowing the current and recent funding rates.
• Check the liquidation price, not just the entry: At 6.7 times leverage, a roughly 15% adverse move liquidates the position. Write down the liquidation price before you trade, and size the position so a normal volatile day cannot reach it.
• Check whether you own anything: You do not. No dividends, no votes, no shareholder rights. If you want income or ownership, buy the stock itself instead — see our beginner guide to how to buy Bitcoin for the contrast between owning an asset and trading a derivative, and our guide to what a Bitcoin ETF is for how regulated exposure products differ from direct ownership.
• Check the venue's dual registration: Only trade on a venue that is both CFTC-designated and SEC notice-registered for security futures. An offshore venue offering the same product is a different risk entirely.
• Check the court docket before the launch date: A freeze order can arrive at any time while this case runs. Confirm the product is still legally tradeable on the day you plan to trade it, not just on the day it was announced.

What Happens Next: Three Scenarios

Scenario 1 — the freeze is denied, launches proceed. Exchanges announce first contracts within weeks, starting with the most liquid names such as Apple, Tesla and Nvidia. Volume migrates gradually from offshore venues, and traditional options markets feel competitive pressure on the most traded names. This is the CFTC's preferred outcome.

Scenario 2 — the freeze is granted, launches pause. Trading stays offshore while the case runs for months. The plaintiffs gain time to lobby Congress for a legislative fix, and the CFTC's streamlined approval path faces a precedent-setting challenge. Offshore volume, including Hyperliquid's $5 billion-a-day market, keeps growing without US oversight.

Scenario 3 — a split decision. The court allows some contracts but not others, or imposes conditions — stricter listing standards, retail restrictions, or additional SEC review — that slow the rollout without killing it. This is the most common outcome in financial regulation fights, and the hardest for traders to plan around, because the product that launches may differ from the product that was approved.

Why Crypto Traders Should Care Even If They Never Touch a Stock

This case will set the template for how fast novel derivatives reach US markets. If the CFTC's Regulation 40.3 path survives, expect faster approvals for other crypto-native products — tokenized stocks, prediction markets and new perpetual designs. If it falls, expect every future product to face a longer, more litigated path. Our earlier coverage of the CFTC's equity perpetual approval and the crypto perpetuals court fight shows this pattern repeating: approval, lawsuit, and a court decision that shapes the next product cycle. The tokenized-stock race covered in our NYSE tokenized stocks analysis is the same convergence from the other direction — stocks becoming crypto-like, and crypto products becoming stock-like, until the two markets share one structure.

FAQs

Can I trade US stock perpetuals today?

Not on the basis of the November 3 announcement alone. The CFTC opened a route for qualifying dual-registered exchanges, but named no live contract or launch date, and a lawsuit is seeking to freeze the approvals. Wait for a specific exchange to announce a live listing.

Are stock perpetuals the same as owning a stock?

No. Proposed US designs are cash-settled: you get price exposure with leverage, but no shares, no dividends and no voting rights. If you want ownership, buy the stock itself.

What leverage do stock perpetuals offer?

Coinbase's filing proposes a cap of approximately 6.7 times, reflecting the 15% minimum margin for security futures. Other venues may propose different terms, and final launch terms could differ from filings.

Why did Cboe and Citadel Securities sue?

Their group, the Capital Markets Alliance, argues single-stock perpetuals are security-based swaps under the SEC's exclusive jurisdiction, not security futures products, and that the CFTC sidestepped Congress and administrative law by using its streamlined approval path.

What is the $5 billion figure about?

It refers to reported 24-hour volume of about $4.99 billion on Trade.xyz, a builder market on the offshore venue Hyperliquid, across 142 contracts. It shows the scale of the existing offshore stock-perpetual market that US regulators are trying to bring onshore.

What should I watch next?

The judge's decision on emergency relief in the Manhattan case, the first live contract announcement from Kalshi, Coinbase Derivatives, Bitnomial or Crypto.com's exchange, and any congressional action on the CFTC-SEC jurisdictional question.

Conclusion

November 3, 2026 will be remembered as the day crypto's favourite trading product collided with Wall Street's legal machine. The CFTC said Americans should not have to go offshore to trade stock perpetuals. Cboe and Citadel Securities answered, within hours, that the CFTC had no right to say so. Both sides are partly right: the demand is real and already worth billions a day, and the jurisdictional question is genuinely unresolved.

For traders, the practical message is patience. Do not chase a product that has been approved but not launched, and do not assume a lawsuit means it is dead. Watch the freeze decision, watch the first live listing, and run the five checks before you risk a dollar on leverage that can liquidate a position on a 15% move. The court will decide who regulates this market. The market will then decide whether it wants it — and $5 billion a day offshore suggests it already has.

Sources: Reuters reporting via KTWB; CoinSpeaker on the Hyperliquid lawsuit angle; The Crypto Guide's CFTC explainer and docket update; Crypto-Economy on the November 3 market reaction; ODaily on the four exchanges and Kalshi's 58 contracts.