CFTC investigates Kalshi over event contract submissions
Kalshi says the probe concerns a limited number of submissions, many of which were never launched, and that it is already addressing the issue.
Key takeaways:
- The CFTC is investigating whether Kalshi failed to properly notify the regulator about some of its proposed event contracts.
- The investigation includes weather-related contracts.
- Kalshi head of communications Elisabeth Diana described the notice as a procedural error involving a handful of contracts, and said the company is already addressing it.
US.- The Commodity Futures Trading Commission (CFTC) is investigating whether Kalshi failed to properly notify the regulator about some of its proposed event contracts. The prediction market operator confirmed the probe to CNBC, saying it relates to a limited number of submissions, many of which were never launched. That reportedly includes weather-related contracts.
Kalshi has not said when the CFTC began its review, while chairman Michael Selig declined to comment, citing the agency’s policy on ongoing investigations.
Elisabeth Diana, Kalshi’s head of communications, said: “The notice is about a procedural error involving the submission of a handful of contracts, many of which weren’t live. We are already addressing the issue.”
Under CFTC rules, prediction market operators can introduce event contracts through self-certification, without seeking prior approval. However, the products must still comply with the Commodity Exchange Act.
The investigation adds to the scrutiny facing prediction markets in the US. In October, the New York State Gaming Commission asked a Manhattan court to order Kalshi to comply with subpoenas issued in July on their operations in the state. More recently, the Ninth Circuit rejected Kalshi’s petitions for a panel rehearing and a rehearing en banc over its Nevada ruling.
Frequently asked questions (FAQs)
- Why is the CFTC investigating Kalshi? The CFTC is investigating whether Kalshi failed to properly notify the regulator about some of its proposed event contracts. Kalshi says the probe relates to a limited number of submissions, many of which were never launched, and the investigation includes weather-related contracts.
- How can prediction markets launch event contracts under CFTC rules? Operators can introduce event contracts through self-certification, without seeking prior approval from the CFTC. However, the products must still comply with the Commodity Exchange Act.
