CME Group, the world's largest futures exchange operator, is planning to sue the Commodity Futures Trading Commission over the agency's decision to approve perpetual futures contracts.

Perpetual futures, or perps, are a type of derivatives that don't have an expiration date and allow people to bet on the price movement of assets without owning them directly.

Last month, the CFTC approved bitcoin perpetual contracts as futures contracts. It approved Kalshi's application to make such offerings and issued a no-action stance for Coinbase Financial Markets, Inc., for its plans to offer digital commodity derivatives products.

While perps trading has grown popular in recent years, most of the action has been occurring outside of the U.S. due to regulatory ambiguity.

The Block has reached out to the CFTC for comment.

'Disaster waiting to happen'

CME's Duffy also criticized CFTC's approval of perpetual futures at a conference earlier this month, particularly the elevated leverage compared to CME-listed markets.

"I have grave concerns with the way these contracts are set up," Duffy said at the Piper Sandler Global Exchange & Fintech Conference. "I don't like to see people that don't understand products to potentially get blown out of a contract that they shouldn't be in the first place."

Duffy added that the CFTC's review of perpetual futures wrapped up faster than a typical self-certification window, especially for such a novel instrument.

The current market behavior is similar to that ahead of the 2008 financial crisis, Duffy also said. "The housing market has been supplanted by the speculation market, including predictions and everything else, and this could be a disaster waiting to happen," said the CME CEO.

"I totally disagree with the government, and I'll deal with it as we need to move forward," Duffy said at the conference.

Duffy, who plans to step down from his role in March 2027, told CNBC on Wednesday that he is "always up for a good battle," and that the company is not taking this matter lightly.