The Shanghai Futures Exchange is suing the US Commodity Futures Trading Commission over perpetual futures.

Terry Duffy, Chief Executive Officer of the Chicago Mercantile Exchange Group, said on Wednesday that the exchange will file a lawsuit regarding the approval of perpetual futures contracts by the U.S. Commodity Futures Trading Commission. Perpetual futures are a type of listed derivative without an expiration date, allowing traders to hold positions indefinitely without the need to roll over contracts. In addition to no explicit deadline, perpetual futures also allow for high leverageoften as high as 50 timesenabling investors to amplify their exposure to market fluctuations. Duffy warned earlier this month that such extreme leverage, combined with the prevalent automatic liquidation mechanisms in the industry, poses a significant threat to retail investors as they may not fully realize the corrosive impact of funding costs on their positions. He also criticized the CFTC's approval process for being too hasty, bypassing the traditional "comprehensive review" of what they see as a "novel and complex" instrument.