KalshiEX, the CFTC-registered derivatives exchange and prediction market operator with $52 billion in event-contract volume and a $22 billion valuation, submitted two never-expiring futures contracts to US regulators on August 18, pushing the platform deeper into territory traditionally dominated by CME Group and challenging the boundaries of what qualifies as a regulated futures product.

The filings, submitted under CFTC voluntary product approval rules (Commission Regulation 40.3), cover a perpetual futures contract tied to the MerQube US Large Cap Index (ticker: US500PERP) and a second contract referencing the spot price of copper (COPPERPERP). Regulators have up to 45 days to review each filing, with an option to extend the process beyond 90 days. On the same day, Kalshi filed separately for gold and silver perpetuals, signalling a broad push into commodities that goes well beyond digital assets.

Perpetual futures, borrowed from the crypto industry, are contracts with no expiration date. Rather than rolling over to a new contract month, traders hold positions indefinitely and pay or receive a periodic funding rate that keeps the contract price anchored to the underlying market. The structure has become the dominant trading instrument in global crypto markets, recording more than $90 trillion in notional volume in 2025 alone. Until this year, US traders could access these products only through offshore, unregulated venues.

The MerQube Workaround

For the equity index contract, Kalshi did not use the S&P 500 directly. Instead, it built the product around the MerQube US Large Cap Index, a float-weighted benchmark covering the 500 largest US-listed and domiciled companies. The construction closely mirrors the S&P 500 but sidesteps the licensing arrangements that S&P Dow Jones Indices controls. Contract specifications include a $1 multiplier per index point, a $0.05 minimum price increment, and continuous trading from Sunday 6 PM through Friday 5 PM Eastern time. Daily settlement anchors to the regular US equity session. Because broad-based equity index contracts fall under CFTC jurisdiction rather than the SEC's, Kalshi does not need SEC approval to list US500PERP.

Bitcoin Perps Set the Template

Kalshi's move into equity and commodity perps follows the rollout of its bitcoin perpetual, BTCPERP, which launched June 3, 2026, as the first CFTC-regulated crypto perpetual in US history. The June 3 launch also included 12 other digital asset perpetual contracts, a breadth that signals how aggressively Kalshi moved once regulatory approval was secured. The bitcoin product cleared $1 billion in trading volume within its first week and surpassed $5.5 billion within two weeks, backed by a pre-launch waitlist of more than one million users. Kraken followed on June 14 via the Bitnomial exchange, listing its own CFTC-regulated perps. Bitcoin perpetual funding rates across the market have since settled near zero (ranging from roughly -0.001 percent to 0.01 percent per eight-hour period as of late July), suggesting the initial speculative premium has compressed.

CFTC Chairman Michael Selig framed the agency's May approval of BTCPERP as "a pivotal step toward bringing digital commodity derivatives markets under US oversight," and later clarified that each new underlying asset would be evaluated individually. "Perpetual contracts will be judged on an asset-by-asset basis," Selig said in June.

CME's Lawsuit Is the Central Risk

The filings land in a legally contested environment. CME Group, which dominates regulated US equity index futures through its E-Mini S&P 500 product, filed suit against the CFTC in the US District Court for the District of Columbia on June 18. CME argues that perpetual contracts are swaps under the Dodd-Frank Act, not futures, and that the CFTC's one-day approval of BTCPERP was procedurally unlawful. The distinction carries real consequences for traders: futures contracts receive favorable Section 1256 tax treatment (a 60/40 split between long-term and short-term capital gains), while swaps do not. The case remains active and directly threatens the legal standing of every perpetual product Kalshi has filed, including the new equity and copper contracts.

A CME victory and the resulting reclassification of perpetuals as swaps would carry consequences beyond Kalshi's filings. On-chain perpetual decentralised exchanges, including dYdX, Hyperliquid, and GMX, operate on structurally identical models and serve a substantial share of the crypto-native audience that US-regulated products are now seeking to reach. A legal ruling that redefines what these contracts are could complicate the regulatory treatment of those platforms as well.

Copper's Regional Dimension

The copper filing carries weight beyond US markets. Benchmark copper traded near $14,000 to $14,500 per tonne in early 2026, up more than 40 percent year-on-year, driven by AI data center construction, electric vehicle adoption, and power grid expansion. Citigroup has forecast a peak of approximately $15,000 per tonne for copper in 2026, reinforcing why demand for regulated hedging tools in this market is arriving now. Supply is not keeping pace. Wood Mackenzie estimated a 304,000-tonne refined copper deficit in 2025, with a wider gap expected this year. AI data centers alone are projected to consume roughly 475,000 tonnes of copper annually by 2026.

The supply crunch spans Africa and Asia. Zambia and the Democratic Republic of Congo together could supply over 4.5 million tonnes of copper in 2026, accounting for a major share of global mined output, with copper representing approximately 90 percent of Zambia's foreign currency earnings. Exports from DRC's Kamoa-Kakula mine fell roughly 15 percent in Q1 2026, and Zambia's output dropped 4.27 percent over the same period. Disruptions at Indonesia's Grasberg mine have added further pressure to global supply totals.

A regulated perpetual copper contract would, in theory, offer regional mining companies and commodity traders a hedging tool. In practice, Kalshi is a US-regulated exchange and has made no access announcements for African or other non-US markets. Direct participation would depend on Kalshi's eligibility rules, local regulatory status in each jurisdiction, and whether intermediaries choose to offer the product.

African retail traders have already demonstrated appetite for this type of exposure. Bitget recorded more than $5 billion in cumulative volume from African users on stock-linked crypto perpetuals (products mirroring Apple, Tesla, Nvidia, and MicroStrategy) within days of those contracts launching in late 2025. The demand is real; the question is whether a regulated US product can reach those users or whether access barriers will continue pushing them toward offshore venues.

South Asia and the Offshore Flow

The same question applies across South Asia, where retail trading appetite is substantial but regulatory friction redirects volume offshore. India's 30 percent crypto tax regime has been a documented driver of Indian retail traders toward unregulated offshore platforms where perpetual contracts are the primary instrument. The OECD Asia Capital Markets Report 2026 identified Asia as the most active crypto market globally by retail volume, set against a $4.4 trillion global crypto market capitalisation recorded as of October 2025. Pakistan and Sri Lanka show comparable patterns, with retail traders in both markets accessing leveraged perpetual products primarily through venues that carry no domestic regulatory cover. A US-regulated perpetual tied to equity indices or copper does not automatically reach these users, but the existence of a regulated template creates pressure on regional authorities to develop equivalent domestic frameworks or establish access arrangements with CFTC-registered venues.

What Comes Next

The CFTC review clock began running August 18. Assuming no extension, an initial decision on the filings could come by early October. The CME lawsuit will continue to develop in parallel in federal court and could reshape the regulatory picture regardless of how CFTC staff rule on these specific contracts. BitMEX, which invented the leveraged perpetual swap in 2014, announced in July that it will shut down by September 23. The timing places its closure alongside the expansion of US-regulated alternatives, though the two developments are independently reported and should not be read as cause and effect. Whether Kalshi can fill that space, legally and practically, depends on how the courts and regulators resolve a fight over a very basic question: what exactly is a perpetual futures contract?