Kalshi’s New Political Prediction Markets Halted as CFTC Appeals Loss

Kalshi, the company behind brand-new political prediction markets, has had its operations halted as the Commodity Futures Trading Commission (CFTC) appeals a recent loss in court. The CFTC had requested an emergency stay after a lower-level judge ruled in favor of Kalshi, stating that the agency had exceeded its authority by banning the company from listing US political prediction markets. Kalshi argued that the CFTC’s ban was arbitrary and filed a lawsuit against the agency. Although the judge denied the CFTC’s request to prevent Kalshi from listing contracts, the CFTC filed an emergency motion to stay the markets while it considers appealing the ruling. As a result, trading on Kalshi’s two new contracts, which asked about the party likely to win the House and Senate, has been temporarily paused. The CFTC believes that the public interest may be harmed if the contracts continue, while Kalshi’s attorneys argue that no administrative stay is necessary. The appeals court has ordered Kalshi to halt its contracts while the motion is being considered, with filings from both parties due by Friday and Saturday evening respectively. Meanwhile, the CFTC is also in the process of rulemaking to ban political prediction markets in the US, citing concerns about fraud in the underlying market of elections. However, Judge Cobb’s opinion focused on the case against Kalshi specifically and deemed the agency’s reasoning irrelevant to her assessment.