Case 1:25-cv-12578-RGS Document 1 Filed 09/15/25 Page 22 of 28
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.
G.
Robinhood Will Suffer Irreparable Harm Without Injunctive Relief.
57.
In light of Massachusetts’s complaint and motion for preliminary
injunction filed against Kalshi, in which Massachusetts sets forth allegations explicitly referring
to Robinhood and the availability of Kalshi’s contracts on Robinhood’s platform, Massachusetts
v. Kalshi , No. 2584CV02525, Dkts. 1, 4, and because Robinhood intermediates its customers’
event contract trades, including sports-related event contract trades, on Kalshi’s exchange,
Robinhood faces the imminent threat of a similar enforcement action by Massachusetts and/or
the Massachusetts Gaming Commission and the potential for civil and criminal penalties. The
sanctions for violation of the Massachusetts statute that Massachusetts alleges Kalshi violated
(Mass. Gen. Laws ch. 23N) include civil and criminal penalties, including “a civil penalty not to
exceed $2,000 for each violation or $5,000 for violations arising from the same series of events”
and imprisonment and criminal fines, which escalate after the first offense. Mass. Gen. Laws
ch. 23N, § 21. The threat of prosecution is actual and imminent, especially in light of the fact
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