CFTC Sues Utah to Block State Enforcement Against Registered Contract Markets, Citing Federal Preemption
The Commodity Futures Trading Commission announced on October 27 that it has filed a lawsuit against Utah to block the state's efforts to shut down CFTC-registered contract markets using state laws. The suit follows Utah's decision to file civil enforcement actions in state court against CFTC-regulated markets and other businesses; the CFTC says the state's effort obstructs Congress's decision to federally preempt state law in this area.
CFTC Chairman Michael S. Selig said Utah seeks to shut down prediction markets across a wide variety of markets, and that event contracts serve hedging and investment purposes while also providing the public with information about the outcomes of future events. He said Congress entrusted the CFTC as the federal regulator with sole responsibility for overseeing these markets, and that the agency has the expertise and responsibility to defend its exclusive jurisdiction over commodity derivatives.
The Commission said the action reflects its firm commitment to maintaining exclusive jurisdiction over CFTC-registered prediction markets, and that it will protect federal interests when a state challenges the lawful operation of a derivatives exchange. The CFTC has also initiated legal proceedings against nine other states and has submitted briefs in four federal courts of appeal and one state supreme court.
Prediction markets, which let traders buy and sell event contracts on the outcomes of future events, have expanded rapidly in the United States, fueling an ongoing jurisdictional dispute between federal regulators and the states.
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Source: GSM · USA (original Chinese edition)
Photo: 图：位于华盛顿的美国商品期货交易委员会总部入口标识。G. Edward Johnson摄，CC BY 4.0，来源：Wikimedia Commons / Photo: Entrance sign at the headquarters of the U.S. Commodity Futures Trading Commission in Washington, D.C. Photo by G. Edward Johnson, CC BY 4.0, via Wikimedia Commons
