Case 1:25-cv-12578-RGS Document 1 Filed 09/15/25 Page 8 of 28
24.
This means that while Robinhood customers are placing orders for event
contract trades in their Robinhood accounts, the trades themselves are taking place on Kalshi’s
CFTC-designated exchange. This is no different from when a Kalshi customer places an order
for an event contract trade through her Kalshi account, which is then executed on Kalshi’s
exchange. Here, the user interface is Robinhood’s instead of Kalshi’s, which is convenient for
Robinhood customers but does not affect the way in which trades are executed on Kalshi’s
exchange or regulated by the CFTC; it merely adds additional CFTC regulation of Robinhood’s
activities as an FCM.
C.
The Commodity Exchange Act and the Commodity Futures Trading Commission
25.
Since the 1930s, futures contracts have been regulated by the federal
government. In 1936, Congress passed the Commodity Exchange Act (“CEA”), which provided
for federal regulation of all commodity futures trading activities and required that all futures and
commodity options be traded on organized, regulated exchanges.
26.
In 1974, Congress passed a series of amendments to update the CEA’s
regulatory framework and established the Commodity Futures Trading Commission (“CFTC”),
which is empowered to oversee and regulate commodity futures and (since 2010) swaps trading
under the CEA. Congress intended to centralize regulatory authority with the CFTC to avoid the
“total chaos” that could ensue if states attempted to regulate the futures markets, thereby
subjecting exchanges to different regulations. Hearings Before the Committee on Agriculture
and Forestry, United States Senate, on S. 2485, S. 2587, S. 2837 and H.R. 13113, 93d Cong., 2d
Sess. 685 (1974) (“Senate Hearings”) (statement of Sen. Clark); see also Am. Agric. Movement,
Inc. v. Bd. of Trade of City of Chicago , 977 F.2d 1147, 1156 (7th Cir. 1992) (setting forth
legislative history of the CFTC Act of 1974), abrogated on other grounds by Time Warner Cable
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