Case 1:25-cv-14723 Document 10-1 Filed 08/19/25 Page 12 of 34 PageID: 84
The CEA provides that the CFTC has “exclusive jurisdiction” over transactions involving
event contracts—which, as described below, are swaps or contracts of sale of a commodity for
future delivery—traded on registered exchanges (known as “designated contract markets”):
“The Commission shall have exclusive jurisdiction . . . with respect to accounts, agreements
(including any transaction which is of the character of, or is commonly known to the trade as, an
‘option’, ‘privilege’, ‘indemnity’, ‘bid’, ‘offer’, ‘put’, ‘call’, ‘advance guaranty’, or ‘decline
guaranty’), and transactions involving swaps or contracts of sale of a commodity for future
delivery (including significant price discovery contracts), traded or executed on a contract
market designated pursuant to section 7 of this title . . . .” 7 U.S.C. § 2(a)(1)(A) (emphasis
added). The CEA expressly preserves state authority to regulate transactions “not conducted on
or subject to the rules” of a CFTC-regulated exchange. Id. § 16(e)(1)(B)(i).
To receive the CFTC’s designation as a contract market, an exchange must apply and set
forth its ability to comply with CFTC rules and regulations. Id. §§ 2(e), 7(a); 17 C.F.R.
§ 38.3(a). The CFTC’s comprehensive regulatory framework for contract markets, including a
set of 23 “Core Principles,” 17 C.F.R. pt. 38, is designed to ensure and protect the integrity of
those markets. Status as a CFTC-designated contract market “imposes upon [an exchange] a
duty of self-regulation, subject to the Commission’s oversight,” requiring the exchange to “enact
and enforce rules to ensure fair and orderly trading, including rules designed to prevent price
manipulation, cornering and other market disturbances.” Am. Agric. Movement, Inc. , 977 F.2d
at 1150-51. The CFTC is authorized to suspend or revoke an exchange’s designation if it fails to
comply with any of the provisions of the CEA or the CFTC’s regulations. 7 U.S.C. § 8(b).
Kalshi, whose event contracts Robinhood makes available on its platform, is a CFTC-designated
contract market. KalshiEx , 2025 WL 1218313, at *2.
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