Case 2:25-cv-01541-JCM-DJA Document 1 Filed 08/19/25 Page 21 of 26
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includes entities like Robinhood that accept orders or otherwise facilitate transactions, as well as entities like Kalshi that execute transactions. See id. § 1a(28)(A) (CEA expressly envisions FCMs facilitating transactions in swaps and commodities for future delivery). 64. If states could regulate some but not all entities relevant to these transactions, such regulation would infringe on the CFTC’s exclusive jurisdiction and fracture what Congress intended to be a uniform set of regulations for commodity futures and swaps trading. A state cannot circumvent the exclusive jurisdiction of the CFTC by enforcing state law against an entity involved in facilitating a transaction when the state has been enjoined from enforcing state law against the entity involved in executing that same transaction. Indeed, as the CFTC itself recently explained to the D.C. Circuit, “due to federal preemption, event contracts never violate state law when they are traded on a [designated contract market] .” CFTC Brief, KalshiEx LLC v. U.S. Commodity Futures Trading Comm’n , No. 24-5205, at 27, 2024 WL 4512583 (D.C. Cir. Oct. 16, 2024) (emphasis added). 65. The conclusion that preemption applies equally to Robinhood’s facilitation of these transactions as an FCM is further supported by the fact that Congress explicitly included FCMs such as Robinhood within the extensive set of federal regulatory requirements and CFTC oversight established to manage commodity derivatives trading. The “comprehensive regulatory structure to oversee the volatile and esoteric futures trading complex,” Curran , 456 U.S. at 356 (internal quotation marks omitted), established by Congress includes FCMs that facilitate purchases and sales of commodities for future delivery and swaps; indeed, this is in part what defines an FCM, 7 U.S.C. § 1a(28)(A)(i)(I)(aa)(AA), (CC). As noted above, FCMs such as Robinhood that are registered with the CFTC must comply with a multitude of requirements, including minimum financial requirements, 17 C.F.R. §§ 1.12, 1.17, reporting requirements, id. §§ 1.10(b), 1.10(d), 17.00, and disclosure requirements, id. § 1.55. They must also establish and enforce policies relating to trading standards, risk management, and conflicts of interest. Id. §§ 1.15, 1.71, 155.3. State regulation of orders on an FCM (when those orders will be executed on a DCM) would conflict with federal authorization of transactions through FCMs subject to
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