Overview
- On Tuesday the Commodity Futures Trading Commission used emergency authority to direct KalshiEX to continue normal exchange operations in New York while the competing litigation proceeds.
- New York filed suit on July 31 seeking at least $36 billion in disgorgement and penalties and accusing Kalshi of operating an unlicensed sports‑betting business that allowed 18‑ to 20‑year‑olds to trade without a state gaming license.
- Kalshi notified the CFTC on Aug. 1 that a temporary restraining order would force rapid liquidation of open positions and could leave traders with unintended one‑sided exposures, a risk the CFTC cited in its order.
- Kalshi has begun rolling out Nasdaq’s market surveillance platform to flag manipulation and insider trading in real time and to format trade data for the CFTC as part of broader compliance upgrades.
- The dispute is unresolved across multiple states and courts, with split rulings and parallel CFTC lawsuits against nine states, an outcome that could produce geofencing, divergent tax and consumer protections, and a likely appeal to higher courts or Congressional action.