The U.S. Commodity Futures Trading Commission (CFTC) has directed prediction market platform Kalshi to continue operating its exchange, following normal business practices and the core principles of the Commodity Exchange Act. The CFTC previously determined that New York state's attempt to block the platform constituted a market emergency. The agency warned that forcing the liquidation of a bitcoin price position expiring at the end of 2026 could lead traders to unwind bitcoin and other asset positions simultaneously, exposing arbitrageurs holding opposing positions to one-sided risk. The order also cited contracts tied to the federal funds rate, Strait of Hormuz traffic, and the timing of a recession. Separately, a ruling signed by Judge Vernon D. Oliver of the U.S. District Court for Connecticut held that Kalshi's sports contracts are not swaps; even if they were, federal law would not preempt Connecticut gambling regulations.
CFTC Directs Kalshi to Continue Operations
The U.S. Commodity Futures Trading Commission (CFTC) has ordered prediction market platform Kalshi to keep its exchange running, in line with ordinary business practices and the core principles of the Commodity Exchange Act. The CFTC had earlier determined that New York state's attempt to halt the platform constituted a market emergency.
According to the CFTC, forcibly liquidating a bitcoin price position that runs through the end of 2026 could prompt traders to simultaneously unwind positions in bitcoin and other assets, leaving arbitrageurs with opposing positions exposed to one-sided risk. The order also referenced contracts tied to the federal funds rate, traffic through the Strait of Hormuz, and the timing of a recession.
Court Ruling Backs Kalshi
A ruling signed by Judge Vernon D. Oliver of the U.S. District Court for Connecticut concluded that Kalshi's sports contracts are not swaps; and even if they were, federal law would not preempt Connecticut's gambling regulations.
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