CFTC tells SDNY that NinthCircuit wrongly excluded event contracts from swap definition
The Commodity Futures Trading Commission (CFTC) filed an argument in the Southern District of New York telling the court that the Ninth Circuit improperly excluded event contracts from the Commodity Exchange Act's definition of a swap. Attorney Daniel Wallach flagged the filing on X. The available text does not include the CFTC's full reasoning or the case name. Separately, the US Attorney's Office for the Southern District of New York and the CFTC filed an insider trading case involving prediction market event contracts and the misuse of government information.
The CFTC's intervention in SDNY gives Kalshi a second federal forum to challenge the Ninth Circuit's swap ruling that stripped its preemption shield in Nevada. The commission is now arguing against its own circuit's precedent, splitting federal enforcement from federal jurisprudence. Kalshi can use this SDNY line to pressure the Supreme Court by showing a genuine inter-circuit dispute exists.
New Jersey's parallel cert petition gains reinforcements. Polymarket and ForecastEx watch closely because any SDNY ruling that reinstates swap status for event contracts would restore the federal shield across every state. The CFTC's filing timing, days after the Nevada appeals loss and alongside a fresh insider trading case, signals deliberate coordination across the commission's enforcement and litigation divisions.