CME Group Chief Executive Terrence Duffy said the company plans to sue the U.S. Commodity Futures Trading Commission (CFTC) after its approval of perpetual futures contracts earlier this month.

Speaking to CNBC, Duffy argued that the Kalshi perpetual futures product does not meet the definition of a futures contract under the Dodd-Frank Act. Instead, he said it more closely fits the classification of a swap, which is governed by a different regulatory regime.

He emphasized that the law clearly separates swaps from futures, noting that instruments involving ongoing payment exchanges between counterparties are typically treated as swaps. On that basis, he questioned the CFTC’s decision to approve the product as a futures offering.

Duffy, who is set to leave CME next year, said the exchange would need clearer regulatory standards before considering whether to list perpetual futures contracts itself. He added that the current rules remain insufficiently defined.

He also criticized the regulator’s communications around market initiatives such as 24/7 trading, suggesting the agency had in some cases presented proposals as formal rules.

“There are still many unresolved issues,” Duffy said.

A CFTC spokesperson rejected CME’s claims, accusing the exchange of choosing litigation over competition. The agency said it is prepared to defend its position and expects the lawsuit to be dismissed.