Crypto.com Follows Kalshi Steps and Sues Maryland 

A Federal Fight Kicks Off

The suit aims to slap down a cease-and-desist letter sent by MLGCC on April 7, which branded CDNA’s Sports Event Contracts as illegal sports betting under state law, threatening fines and jail time.

CDNA’s pushing for a court ruling and injunction to stop Maryland’s regulators from meddling, arguing their contracts fall under federal, not state, oversight. “We’re confident the governing law will be recognized and upheld in our favor,” said Nick Lundgren, Crypto.com’s Chief Legal Officer.

The clash stems from Maryland’s claim that CDNA’s contracts, offered to residents, need a state sports wagering license. CDNA fired back, saying its federally regulated status trumps state rules, and Maryland’s move risks big harm to its business and customers.

Why Crypto.com’s Digging In

CDNA, a designated contract market (DCM) under the Commodity Futures Trading Commission (CFTC), argues its Sports Event Contracts are legit financial derivatives, not gambling.

These exchange-traded instruments, certified by the CFTC, let users take “yes” or “no” positions on event outcomes, like sports results, to manage risk. CDNA insists Congress gave the CFTC “exclusive jurisdiction” over DCMs and their products, meaning states like Maryland can’t butt in.

Federal law, backed by the Constitution’s Supremacy Clause, overrides conflicting state regulations, and Maryland’s push lacks legal ground.

The lawsuit leans on a recent Nevada federal court win by KalshiEX, LLC, where a judge blocked state attempts to regulate similar event contracts, affirming CFTC’s sole authority.

CDNA argues the same logic applies: the question isn’t whether contracts resemble gambling, but whether they’re offered by a federally regulated DCM. Maryland’s demand, CDNA says, misapplies a state business registration law, which doesn’t cover these contracts and isn’t MLGCC’s to enforce anyway.

Stakes and Fallout

Maryland’s cease-and-desist order puts CDNA in a tough spot. Complying would mean rolling out costly geolocation tech to block Maryland users, losing revenue, and taking a competitive hit against other DCMs offering event contracts nationwide.

It could also violate CFTC rules on “impartial access” to markets, messing with CDNA’s operations. Worse, MLGCC’s threats of civil and criminal penalties, plus a nod to the state’s Attorney General, could dent CDNA’s rep and ability to operate.

CDNA calls this “irreparable harm,” arguing Maryland’s overreach disrupts a unified national derivatives market.

The Maryland lawsuit’s just getting started, with no court ruling yet. Crypto.com’s banking on Kalshi to keep its Sports Event Contracts alive.