KEY TAKEAWAYS
- Crypto.com | Derivatives North America (CDNA) has filed a lawsuit against the Maryland Lottery and Gaming Control Commission to challenge state regulation of federally-governed derivatives trading.
- The lawsuit follows a cease-and-desist notice from Maryland regarding CDNA’s Sports Event Trading product, which is regulated by the Commodity Futures Trading Commission (CFTC).
- CDNA argues that state attempts to regulate CFTC-jurisdiction derivatives lack legal merit, citing a recent U.S. District Court ruling in favor of federal jurisdiction.
- Crypto.com acquired the CFTC-registered North American Derivatives Exchange, highlighting its commitment to offering compliant and regulated derivatives services.
April 21, 2025 – Crypto.com | Derivatives North America (CDNA) has filed a lawsuit against the Maryland Lottery and Gaming Control Commission. The suit seeks declaratory and injunctive relief from the state’s attempts to regulate federally-governed derivatives trading activities.
The legal action follows a ‘cease-and-desist’ notice sent by the Maryland Lottery and Gaming Control Commission to CDNA concerning its Sports Event Trading product. This product, offered by CDNA, is a prediction market event contract regulated by the Commodity Futures Trading Commission (CFTC) under the Commodity Exchange Act.
Federal vs. State Jurisdiction
CDNA’s Sports Event Trading product is part of a CFTC-regulated exchange and designated contract market. The Commodity Exchange Act, which governs these contracts, was recently upheld by the U.S. District Court for Nevada. The court ruled against similar regulatory attempts by the Nevada Gaming Board, reinforcing the federal jurisdiction over such derivatives.
According to CDNA, any state action, including Maryland’s, that attempts to regulate derivative contracts under CFTC jurisdiction lacks merit. Nick Lundgren, Chief Legal Officer of Crypto.com, stated, “The law is very clear for derivatives and prediction market event contracts, and we are proud to offer these services through a fully compliant and regulated platform.”
Background and Implications
In 2022, Crypto.com acquired the CFTC-registered exchange and clearinghouse, North American Derivatives Exchange, Inc., which operates as Crypto.com | Derivatives North America. Besides prediction market event contracts, CDNA offers a range of derivatives, including those on digital assets, foreign exchange, equity indices, and commodities.
The lawsuit underscores the ongoing tension between state and federal authorities over the regulation of derivatives and prediction markets. Crypto.com is confident that existing laws will be upheld in its favor, as stated in their announcement here.
Why This Matters: Impact, Industry Trends & Expert Insights
Crypto.com | Derivatives North America has filed a lawsuit against the Maryland Lottery and Gaming Control Commission, challenging state-level attempts to regulate federally-governed derivatives trading activities.
Recent trends in state vs. federal regulation of crypto derivatives show a shift towards more structured federal approaches. The U.S. Securities and Exchange Commission (SEC) is refining its stance on crypto regulation by establishing clearer registration pathways for token issuers and focusing on compliance over enforcement. This aligns with the ongoing legal battle between Crypto.com and the Maryland authorities over jurisdictional rights. Coincub
Expert opinions on state interference in CFTC-regulated markets highlight significant legal and regulatory challenges, particularly regarding the scope of the Commodity Futures Trading Commission’s (CFTC) authority. This supports the significance of Crypto.com’s lawsuit, as it underscores the contentious nature of state versus federal jurisdiction in the regulation of derivatives. Brownstein Hyatt Farber Schreck
Explore More News:
Disclaimer: The views expressed in this article are those of the authors and do not necessarily reflect the official policy of CoinsHolder. Content, including that generated with the help of AI, is for informational purposes only and is not intended as legal, financial, or professional advice. Readers should do their research before taking any actions related to the company and carry full responsibility for their decisions.
