CFTC Stands Down New York in Kalshi Emergency Order
The Commodity Futures Trading Commission (CFTC) has issued an emergency order shielding Kalshi, a prediction market exchange, from New York's enforcement action. The CFTC claims that New York's suit against Kalshi amounts to a 'major market disturbance' and could stop the exchange from operating altogether. This is because Kalshi is headquartered in New York and offers event contracts on various topics, including Federal Open Market Committee moves and crypto asset prices.
The emergency order cites a trader holding a position on Bitcoin's price at the end of 2026 as an example of how a forced liquidation could wreck a strategy and force the trader to unwind their holdings. The CFTC argues that this would create arbitrage driven by enforcement risk rather than the events being traded.
New York has filed a petition seeking a permanent injunction, accounting, restitution, disgorgement, damages, triple Kalshi's gain, and $100,000 for each unauthorized sports-wagering offer. The CFTC order also mentions a filing in the removed federal case seeking at least $36 billion in compensatory damages.