Case: 25-7516, 01/23/2026, DktEntry: 33.1, Page 41 of 110
Thus, the mere fact that a contract is traded on a DCM does not mean
that the CFTC has “exclusive jurisdiction” over it. And the fact that a con-
tract is traded on a DCM does not mean it is a “swap” or other derivative,
because nothing in the CEA restricts DCMs to those financial instruments.
Products are traded on DCMs that are not listed in Section 2(a)(1)(A), such
as “spots” (contracts to directly buy the underlying commodity). E.g. , Chi.
Mercantile Exch., Rulebook ch. 13, at 2, perma.cc/YW8G-D66W (spot con-
tracts on foreign currencies); CFTC, Acting Chairman Pham Announces
First-Ever Listed Spot Crypto Trading on U.S. Regulated Exchanges (Dec.
4, 2025), perma.cc/6XC8-EXY8 (spot contracts on cryptocurrencies).
In interpreting a statute, this Court cannot “ignore [its] plain text”;
instead, the Court “appl[ies] the text” as written. United States v. Lucero ,
989 F.3d 1088, 1094 (9th Cir. 2021). Thus, in order to invoke the CEA as a
basis for preemption, Kalshi must show that its event contracts are “swaps”
or other listed derivatives.
2. Kalshi’s Contracts Are Not “Swaps” A swap is a financial instrument by which two parties agree to ex-
change cash flows on financial obligations, as a means of hedging volatility
and managing risk. Thrifty Oil , 322 F.3d at 1042. Because there are many
different types of swaps in the market, the CEA sets out a detailed, six-part
definition of “swap.” 7 U.S.C. § 1a(47)(A). Kalshi relies on the second part,
which covers a contract where “payment” is “dependent on” the “occurrence,
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