FinTech Five

1. CFTC Seeks Public Comment on Notice of Proposed Rulemaking Concerning the Inclusion of Certain Event Contracts in the Definition of ‘Swap’

On October 9, the Commodity Futures Trading Commission (CFTC) published a proposed rule adding new paragraph (2)(i)(G) to the definition of “swap” in 17 CFR § 1.3 to expressly include “event contracts, including those based on sports, politics, cultural, and weather-related events.” The CFTC notes that its authority under Dodd-Frank allows it to “further define” the term “swap” and argues that event contracts already qualify as swaps under several prongs of the statutory definition. The CFTC’s proposed rule follows a developing circuit split (KalshiEX v. Assad (9th Cir.) and KalshiEX v. Schuler (6th Cir.)) and conflicting state actions, including Minnesota’s criminalization of prediction markets; Arizona’s criminal charges against a designated contract market (DCM); and court-ordered geofencing in Michigan, Washington, and Nevada. As of