Case 1:25-cv-14723 Document 1 Filed 08/19/25 Page 22 of 28 PageID: 22
55. 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 CFTC jurisdiction. See id. § 1a(28)(A) (CEA expressly envisions FCMs facilitating transactions in swaps and commodities for future delivery). 56. In short, the “oversight of futures commission merchants (‘FCMs’)” is an “important aspect” of the CFTC’s oversight responsibility for futures trading. Prestwick Capital Mgmt., Ltd. v. Peregrine Fin. Grp., Inc. , 727 F.3d 646, 650 (7th Cir. 2013). FCMs like Robinhood are therefore an integral part of the fabric of the CEA’s comprehensive regulatory scheme, and their activities in facilitating trading on DCMs are equally subject to federal preemption as those of DCMs like Kalshi.
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