Case 2:25-cv-01541-JCM-DJA Document 7 Filed 08/19/25 Page 15 of 31
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requirements related to risk management, see id. § 1.15. The CFTC requires FCMs to “establish and enforce internal rules, procedures and controls to” ensure compliance with certain trading standards. Id. § 155.3. FCMs must also “adopt and implement written policies and procedures” to ensure that they and their employees comply with CFTC regulations concerning conflicts of interest. Id. § 1.71. Finally, the CFTC imposes recordkeeping requirements on FCMs. Id. §§ 1.14, 1.18. Failure to comply with these requirements could require the FCM to “transfer all customer accounts and immediately cease doing business as a futures commission merchant.” Id. § 1.17(a)(4). C. Robinhood, Event Contracts and Kalshi. The companies within the Robinhood organization are financial-services companies that are democratizing finance by removing barriers to access to financial markets, including by offering zero-commission stock trading and easy-to-use mobile and web applications. Mackenzie Decl. ¶ 2. With their commitment to offering low fees, an intuitive mobile experience and powerful tools, the Robinhood companies empower everyday investors to navigate financial markets safely and efficiently. Id. On March 17, 2025, Robinhood launched its prediction markets hub, through which its customers can place event contract trade orders. 1 Id. ¶ 4. Robinhood intermediates its customers’ event contract trades, including sports-related event contract trades, on Kalshi’s exchange. Id. ¶ 5. Robinhood has entered into agreements with Kalshi that allow it to access Kalshi’s contract market facilities for this purpose. Id. ¶ 6. Those agreements obligate Robinhood to ensure such access is secure and in compliance with all applicable laws, including the CEA and CFTC regulations; they also require Robinhood to comply with Kalshi’s rules. Id.
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1 Robinhood began offering some limited event contract trading starting in October 2024, prior to the launch of the prediction markets hub. Mackenzie Decl. ¶ 4. The only event contracts Robinhood offered in 2024 were related to the outcome of the U.S. presidential election; those contracts were not traded on Kalshi’s exchange. Id.
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