CFTC orders Kalshi to continue trading despite New York dispute
The Commodity Futures Trading Commission has ordered Kalshi to continue operating after the prediction market notified the agency of a market emergency.
US.- The CFTC ordered Kalshi to continue trading despite New York Attorney General Letitia James’ lawsuit against the prediction platform. It invoked its emergency authority powers under the Commodity Exchange Act (CEA), which it says grants it federal authority over contract markets.
James is seeking a restraining order that would prevent Kalshi from offering event contracts across the US. Her petition treats the platform as an unlicensed gambling business and seeks at least $36bn in damages.
CFTC Chairman Michael Selig criticised New York’s action, arguing that the state is attempting to stop the market before courts have issued a final ruling. He said exchanges that match bids and offers across state lines and centrally clear trades operate as interstate financial markets rather than gambling businesses. “New York has no business regulating these interstate financial markets,” Selig said.
The agency said it has now taken legal action against nine states and has filed amicus briefs in the Sixth and Ninth Circuits and before the Supreme Judicial Court of Massachusetts. The CFTC has faced challenges from states seeking to classify prediction markets as gambling operations, while President Donald Trump has backed the agency’s position.
As for Kalshi, a federal judge in New York denied the company’s request for a preliminary injunction against the state gaming regulator on July 7 and rejected its request for protection pending appeal on July 27. Michigan has also restricted Kalshi’s sports markets, while Washington obtained a preliminary injunction against the platform in July.
