Robinhood Sues Nevada, New Jersey Regulators Over Event Contracts
Robinhood Derivatives has taken authorized motion in opposition to regulators in Nevada and New Jersey, accusing the states of unfairly blocking its entry into the sports activities occasion contracts market regardless of current federal court docket rulings in favor of rival platform Kalshi.
Key Takeaways:
- Robinhood sued Nevada and New Jersey regulators, alleging they blocked its occasion contracts regardless of federal rulings favoring Kalshi.
- The corporate argues regulators are ignoring court docket orders, creating an uneven taking part in area within the sports activities occasion contracts market.
- Robinhood is searching for court docket orders and momentary restraining orders to stop enforcement actions whereas its lawsuits proceed.
In complaints filed Tuesday, Robinhood mentioned it started providing occasion contracts in each states after federal judges dominated earlier this 12 months that Nevada and New Jersey gaming regulators couldn’t implement their bans in opposition to Kalshi, which gives contracts regulated by the U.S. Commodity Futures Buying and selling Fee (CFTC).
Robinhood Claims Regulators Creating Uneven Taking part in Discipline
Robinhood argued that regulators have ignored these rulings and continued to threaten enforcement motion, creating an uneven taking part in area.
“If state regulators are permitted to behave in opposition to Robinhood however not Kalshi, then Robinhood will lose out within the sports activities occasion contracts house,” the corporate mentioned in its filings.
The lawsuits comply with Kalshi’s personal authorized battles earlier this 12 months. The prediction market sued each states after receiving cease-and-desist letters over its sports activities betting contracts, contending that federal oversight by the CFTC preempted state playing legal guidelines.
Federal courts sided with Kalshi and barred state regulators from intervening, although each instances stay lively.
Robinhood now claims the identical safety ought to apply to its derivatives platform, which facilitates buying and selling of occasion contracts that finally decide on Kalshi.
These contracts enable customers to take a position on outcomes starting from sports activities video games to elections and are pitched as a solution to carry extra transparency and truth-resolving mechanisms into markets.
In its New Jersey criticism, Robinhood mentioned it contacted the state’s Division of Gaming Enforcement to verify it may function underneath the court docket’s Kalshi ruling.
Officers allegedly refused to decide to standing down and didn’t reply to a number of follow-up requests for conferences.
The same conflict unfolded in Nevada, the place Robinhood claims the state’s Gaming Management Board warned it will deal with any providing of occasion contracts as “willful violations” of legislation, regardless of an area federal court docket siding with Kalshi.
In each instances, Robinhood has requested the courts to problem orders stopping regulators from performing in opposition to it.
The corporate can be searching for momentary restraining orders to defend its enterprise whereas the fits transfer ahead.
Robinhood Faces EU Scrutiny Over Controversial Tokenized Inventory Launch
In the meantime, Robinhood has come under regulatory fire within the EU after launching tokenized inventory merchandise linked to non-public firms like OpenAI and SpaceX.
The Financial institution of Lithuania confirmed it’s investigating the legality and investor disclosures associated to those blockchain-based “Inventory Tokens,” which launched on June 30.
OpenAI publicly disavowed any connection, stating it by no means authorized the tokens and warning traders to be cautious.
The controversy escalated when Elon Musk, reacting to OpenAI’s denial, labeled the agency’s fairness “pretend,” however didn’t straight deal with the SpaceX tokens.
Robinhood clarified that its tokens usually are not precise shares however price-tracking derivatives issued on Ethereum’s Arbitrum community, obtainable solely within the EU.
The publish Robinhood Sues Nevada, New Jersey Regulators Over Event Contracts appeared first on Cryptonews.
