Case 1:25-cv-12578-RGS Document 1 Filed 09/15/25 Page 21 of 28
includes entities like Robinhood that accept orders or otherwise facilitate transactions, as well as
entities like Kalshi that execute transactions.
54.
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).
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
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