USCA4 Appeal: 25-1892
Doc: 16
Filed: 10/15/2025
Pg: 16 of 97
INTRODUCTION In the seminal 1974 amendments to the Commodity Exchange Act
(“CEA”), Congress created the Commodity Futures Trading Commission
(“CFTC”) and gave it “exclusive jurisdiction” over nationwide derivatives
exchanges. 7 U.S.C. § 2(a)(1)(A). In the decision below, the district court
authorized Maryland state regulators to vitiate that exclusive jurisdiction.
These regulators claim sweeping power not only to regulate, but to prohibit,
certain trading on a CFTC-regulated exchange because they are dissatisfied
with the CFTC’s oversight . The district court below refused to preliminarily
enjoin these efforts. This Court should reverse.
KalshiEX LLC (“Kalshi”) is a CFTC -licensed and regulated exchange,
known as a designated contract market (“DCM”). Federal law accordingly
preempts state regulation of trading on Kalshi, as confirmed by every
conceivable marker of legislative intent. The CEA’s text grants the CFTC
“exclusive jurisdiction” over trading on DCMs. 7 U.S.C. § 2(a)(1)(A).
Congress in 1974 deleted the provision that had previously preserved
concurrent state jurisdiction, noting its intent to “preempt the field.” H.R.
Rep. No. 93-1383, at 35 (1974). And Congress repeatedly reinforced —
indeed, expanded — the CEA’s exclusive-jurisdiction provision after courts
uniformly and easily concluded that it preempts state regulation.
1
Made with FlippingBook - Online catalogs