An offshore perps venue hired a former Solicitor General to fight CME
The Hyperliquid Policy Center's brief says nearly $90 trillion of perpetual futures traded globally last year without a single contract on a US-regulated exchange.
The advocacy arm of an exchange no American may legally trade on has hired the government's own former lawyer, to defend the government.
On 9 September 2026 the Hyperliquid Policy Center asked a federal judge in Washington to throw out CME Group's lawsuit against the CFTC. It asked in the voice of Elizabeth Prelogar, who was Solicitor General of the United States from 2021 to 2025.
Read that twice.
The policy shop of an offshore perpetuals venue is now in the U.S. District Court for the District of Columbia, represented by the lawyer who used to argue the federal government's cases at the Supreme Court, defending the federal regulator against the largest derivatives exchange in the world.
The fight underneath is about a contract with no expiry date
A perpetual future never settles. Instead of converging on spot at expiration, it tracks spot through a small periodic payment between the longs and the shorts, which is why it has swallowed crypto derivatives volume. CME has chosen not to list one, and in June it sued the CFTC for letting other venues do so.
The agency had moved first. In May it issued an order allowing Kalshi to list a bitcoin perpetual and confirmed that any US derivatives exchange could follow without asking permission. CME included (the door it says it does not want to walk through).
The number in the brief is the whole political argument
Nearly $90 trillion of notional perpetuals traded globally last year, referencing digital assets, oil, metals and more. Not one of those contracts sat on a US-regulated exchange an American could reach.
Foreign venues took the fees. Foreign treasuries took the tax. If you have ever wondered why Washington suddenly cares about a Cayman order book, that is the paragraph. (The other fight over US crypto market structure this month is legislative, and we covered it in The CLARITY Act vote on September 15 is really a vote on whether a stablecoin can pay you 6 percent.)
Prelogar's brief goes at the standing question directly. "Once a titan of innovation, CME now advances a novel theory of standing under which an incumbent exchange is injured whenever its regulator permits a new product that it chooses not to offer," she wrote. "If CME prevails, every product that the CFTC approves will invite litigation from incumbents who prefer the status quo, and the pace of progress in the U.S. futures markets will slow to a crawl."
Terrence Duffy, CME's chief executive, has called perpetual futures a "disaster waiting to happen" and argued they belong under Dodd-Frank as swaps. His company's complaint says the products compete directly with its own and injure it. Which is an odd thing to say about a product you have publicly declined to sell. How does a company suffer competitive injury from a contract it refuses to list?
CME probably loses on standing, and the loss matters more than the contract
Competitor standing is not nothing in administrative law; airlines and hospitals have won on it. But the usual shape is an agency handing a rival an advantage the plaintiff cannot get for itself. Here the same order opens the same door to CME, which keeps saying no thanks, in public, at volume.
The CFTC moved to dismiss on 2 September and called the suit much ado about nothing. We would expect a dismissal on Article III grounds rather than any ruling on what a perpetual really is, and we would expect it before the end of the first quarter of 2027. A judge who reaches the merits instead, and treats a funding rate as a swap feature, would tell us we read the docket wrong.
Either way CME is worse off, and not mainly in court. It spent this year arguing a product is dangerous while its regulator was writing that product into the rulebook, and the brief it now faces was written by a lawyer whose name on a filing is itself an argument.
Americans already own the thing they are not allowed to use
Something stranger is happening underneath the lawsuit. At a White House press briefing on 19 August, President Trump named Hyperliquid. Jake Chervinsky, who runs the Policy Center, told The Rollup on 7 September that his team had no advance notice of the mention, and reads it as a sign the CFTC is seriously studying a compliant US route for the venue.
And the money is already positioned. Bloomberg's James Seyffart counted roughly $350 million of cumulative inflows into the three US Hyperliquid ETFs since they launched in the spring.
Here's what cumulative flows look like for the US Hyperliquid ETFs since launch this spring: ~$350 million of inflows. $BHYP $HYPG $THYP
Full report: t.co/UegvBVnwsg t.co/0AVqHGPgAp
So the token sits in American brokerage accounts, the exchange does not, and the entity arguing the regulator's side in federal court is funded by the ecosystem that gap belongs to. You can own the equity of a market you are banned from entering.
The date to watch is the ruling on the motion to dismiss. Everything else here is prologue.
