Case 1:25-cv-12578-RGS Document 1 Filed 09/15/25 Page 12 of 28
therefrom.” 7 U.S.C. § 1a(28) (subsection headings omitted). FCMs must register with the
CFTC unless they fall within certain exemptions. Id. § 6f; 17 C.F.R. § 3.10(c).
34.
Similar to a registered DCM (such as Kalshi), registered FCMs such as
Robinhood must comply with a host of federal requirements. FCMs are subject to reporting
requirements to the CFTC, 17 C.F.R. §§ 1.10(b), 1.10(d), 17.00, disclosure requirements to the
public, id. § 1.55, and minimum financial requirements, id. §§ 1.12, 1.17. FCMs must “establish,
maintain, and enforce a system of risk management policies and procedures designed to monitor
and manage the risks associated with the activities of the” FCM, id. § 1.11(c)(1), and the CFTC’s
regulations set forth elements that such a risk management program must include, id. § 1.11(e),
as well as reporting requirements related to risk management, see id. § 1.15. The CFTC requires
FCMs to “establish and enforce internal rules, procedures and controls to” ensure compliance
with certain trading standards. Id. § 155.3. FCMs must also “adopt and implement written
policies and procedures” to ensure that they and their employees comply with CFTC regulations
concerning conflicts of interest. Id. § 1.71. Finally, the CFTC imposes recordkeeping
requirements on FCMs. Id. §§ 1.14, 1.18. Failure to comply with these requirements could
require the FCM to “transfer all customer accounts and immediately cease doing business as a
futures commission merchant.” Id. § 1.17(a)(4).
D.
The Massachusetts Lawsuit Against Kalshi
35.
On September 12, 2025, the Commonwealth of Massachusetts, by and
through its Attorney General, Andrea Joy Campbell, filed a lawsuit against Kalshi for allegedly
“offering sports wagering without a license in violation of G.L. c. 23N, § 5 et seq. ” Exhibit 1
¶ 1. Massachusetts seeks monetary relief and a permanent injunction enjoining Kalshi “from
engaging in sports wagering without a license in violation of G.L. c. 23N.” Id. at 42. In its
Complaint, Massachusetts explicitly refers to Robinhood’s contractual relationship with Kalshi,
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