The Commodity Futures Trading Commission has asserted its authority over prediction-market platform Kalshi, challenging a Michigan court that ordered the firm to cancel certain trades. As the federal regulator overseeing Kalshi's derivatives activity, the CFTC argued that it was inappropriate for Michigan to "bully" the company into reversing transactions. The move underscores an escalating jurisdictional conflict between federal oversight and state-level attempts to regulate prediction markets, particularly those tied to event-based contracts. Kalshi, which operates as a CFTC-regulated exchange, has faced legal pushback from multiple states seeking to restrict its offerings. The regulator's intervention signals its intent to defend its exclusive authority over the platform's trading operations. The outcome could set an important precedent for how prediction markets are governed and whether states can impose requirements that conflict with federal derivatives rules.
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