A federal judge in Minnesota has ruled that the state is likely preempted from enforcing a law that treats prediction market operations as a criminal offense. According to CoinDesk, U.S. District Judge Katherine Menendez found that the Minnesota statute likely conflicts with the federal Commodity Exchange Act, which governs products falling under the jurisdiction of the Commodity Futures Trading Commission.
The court granted a preliminary injunction in favor of Kalshi, Polymarket and the CFTC, halting enforcement of the state law while the case proceeds. In her ruling, Menendez said the contracts at issue are structured as swaps, placing them within the CFTC’s regulatory scope under federal law. She also said federal law likely overrides the Minnesota statute and that the three plaintiffs are likely to succeed on the merits at trial.
The judge also found that allowing the law to remain in effect during the litigation would cause irreparable harm to Kalshi and Polymarket. The preliminary injunction will stay in place until the court issues a final judgment in the case.
U.S. District Judge Katherine Menendez has ruled that a Minnesota law classifying prediction market operations as a criminal offense is likely inconsistent with the federal Commodity Exchange Act, according to CoinDesk.
The judge granted a preliminary injunction to Kalshi, Polymarket and the U.S. Commodity Futures Trading Commission, pausing enforcement of the state law.
Menendez said the contracts offered by prediction markets are structured as “swaps” that fall within the CFTC’s regulatory authority. On that basis, she found that federal law likely preempts the Minnesota statute and that the three plaintiffs are likely to prevail at trial.
She also said that without an injunction, Kalshi and Polymarket would face “irreparable harm.” The preliminary injunction will remain in effect until a final judgment is issued in the case.
This article was originally published by Bit.Fan. For more cryptocurrency news and market insights, visit www.bit.fan. Disclaimer:
The market information, project data, and third-party content displayed on this platform are for industry information sharing only and do not constitute any form of investment advice or return commitment.
Cryptocurrency trading carries high risks. Users should fully assess their risk tolerance and make independent decisions. All profits, losses, and legal responsibilities are borne by the users themselves.
