CFTC orders Kalshi to continue operations amid New York lawsuit

The Commodity Futures Trading Commission (CFTC) enacted its “emergency authority” yesterday and ordered prediction market Kalshi to keep operating in New York state.

It gave the order after Kalshi told the CFTC that a lawsuit in New York is causing a “market emergency.”

The lawsuit, filed by State Attorney General Letitia James in July, seeks a nationwide temporary restraining order against Kalshi and damages equal to three times its gains — a sum the CFTC says is over $36 billion. 

It accuses Kalshi of running an illegal gambling operation that failed to secure a license with the New York State Gaming Commission.

CFTC chairman Michael S. Selig said, “Congress did not intend for derivatives exchanges to be regulated under a patchwork of state gaming laws,” adding that “New York has no business regulating these interstate financial markets.

“The Commission is required by law to ensure order in these markets, and that is what we have done today.”

Read more: The revolving door for lawyers between Kalshi and DOJ

Kalshi and Polymarket both advised by Trump family

Kalshi and rival Polymarket both employ members of the Trump family as their advisors, and both are continuing to fight regulatory court cases across the US.

Kalshi was also sued in July by flight tracking service FlightAware which claims that the prediction market is using its data and brand to display canceled flight markets without FlightAware’s permission. 

The New York lawsuit was also supported by a coalition of American Indian tribes who want to block Kalshi’s operations, which it claims are undermining gaming laws on their land.

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