- The CFTC has ordered prediction market Kalshi to ignore a Michigan state court order to cancel trades, creating a direct legal conflict.
- The agency argues that canceling executed trades undermines market certainty and violates federal commodities law.
- Kalshi says it is in an “impossible position” after already acting to unwind trades as required by the state judge.
Kalshi says it is being placed in an “impossible position” after the U.S. commodities regulator on Tuesday ordered it to defy a Michigan state court ruling by refusing to cancel executed sports betting contracts. On June 29, Ingham County Circuit Court Judge Rosemarie Aquilina ordered Kalshi to cease offering sports betting contracts to Michigan users while a lawsuit over state gambling laws progresses.
However, the Commodity Futures Trading Commission (CFTC) ordered the platform on Tuesday not to comply with that state directive. “We are disappointed by this decision and believe it is unfair to Kalshi,” Robert DeNault, the company’s head of enforcement and legal counsel, said in a statement on X. He added that the firm had already unwound the trades to follow the court order.
The conflicting directives highlight an unresolved regulatory divide between the CFTC and nearly two dozen state regulators over prediction market jurisdiction. Kalshi finds itself caught between state and federal requirements, with DeNault noting the company did not have a choice but to follow the Michigan order.
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