CFTC Steps Into Crypto.com Appeal, Drawing Federal Line on Prediction Markets

In an unopposed motion filed with the US Court of Appeals for the Ninth Circuit, the CFTC asked for permission to submit a late amicus brief in support of North American Derivatives Exchange, the CFTC-registered exchange that operates Crypto.com’s US derivatives platform. The agency also requested a modified briefing schedule to allow parties time to respond. 

Broader regulatory dispute

The procedural filing comes amid a broader regulatory dispute: whether states can regulate or prohibit trading on federally approved derivatives and prediction markets. 

The timing reflects what the CFTC describes as a rapid escalation in state-level challenges to prediction markets. 

The filing points to a growing list of actions, including Nevada’s civil enforcement case against Polymarket, cease-and-desist letters issued by Tennessee regulators to Kalshi, and proposed legislation in Hawaii that would ban prediction markets outright. 

Taken together, the agency argues, these developments raise fundamental questions about whether states can override federal approval of derivatives products. 

"The CFTC has a substantial interest in presenting its view of the proper interpretation of the scope of its exclusive jurisdiction and the correct application of the CEA’s statutory definition of a swap," reads the filing. 

Nevada and gaming interests 

Nevada, long regarded as the US gambling capital, plays a central role that highlights the political economy behind the dispute. 

The state and its gaming regulator have argued that event contracts tied to real-world outcomes fall within their jurisdiction, particularly when they resemble sports betting or other regulated wagering activity. 

The Nevada Resort Association has intervened in the case, reflecting concerns from the local gambling industry that federally regulated prediction markets could compete with state-licensed gaming without being subject to the same rules. 

For the CFTC, however, the issue is less about competition and more about regulatory coherence. The agency frames the dispute as a test of whether states can displace federal law by recharacterizing derivatives products through the lens of local gaming statutes. 

The case began after Nevada regulators moved to block event contracts offered by Crypto.com’s US derivatives arm in June 2025. 

A signal to the market 

If the Ninth Circuit accepts the agency’s arguments, the ruling could strengthen federal preemption and provide greater legal certainty for prediction markets operating under CFTC oversight. A decision the other way would embolden states to continue testing the boundaries of their authority, potentially reshaping where and how event contracts can be offered in the US. 

The court is expected to hear arguments in April, with the outcome likely to reverberate well beyond this single dispute.