Overview
- The Commodity Futures Trading Commission used emergency authority to tell Kalshi to continue normal operations, with the agency saying a shutdown could force liquidations and disrupt other markets.
- New York sued Kalshi on July 31, accusing the platform of running an unlicensed gambling business, alleging it allowed 18- to 20-year-olds to trade sports contracts, and seeking at least $36 billion in penalties and restitution.
- The CFTC’s Aug. 11 emergency order does not decide the core legal question of preemption and the case remains tied up in fights over removal, remand and appeals in federal and state courts.
- Kalshi has moved to strengthen oversight by partnering with Nasdaq for market surveillance technology and simultaneously faces a New York City Council probe into marketing practices at Kalshi, Polymarket, Coinbase and Gemini Titan.
- The dispute is part of a wider clash between the CFTC and multiple states, with the agency suing nine states and courts issuing mixed interim rulings that could lead to geofencing, account blocks or calls for Congress or higher courts to set a single rule.