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Kalshi says conflicting CFTC and Michigan orders put it in an impossible spot
After a Michigan court ordered Kalshi to stop offering certain sports betting contracts to state users, the CFTC told the platform not to cancel executed trades, citing risks to market certainty.
Kalshi said it faces an “impossible position” after conflicting actions from the US Commodity Futures Trading Commission and Michigan regulators regarding the platform’s prediction market operations, according to Cointelegraph. The company’s legal counsel said it disputes the latest decision and argued that it is being forced to reconcile state court demands with federal regulatory obligations.
Cointelegraph reports that on June 29, an Ingham County Circuit Court judge ordered Kalshi to cease offering sports betting contracts to Michigan users while a lawsuit over whether Kalshi violated state sports betting laws proceeds. Kalshi said it already acted by unwinding trades to comply with the court order.
On Tuesday, the CFTC ordered Kalshi not to comply with the Michigan order, directing the platform to continue operating and avoid canceling executed trades, according to Cointelegraph. The report says the regulator warned that cancelling already executed derivatives transactions is unprecedented and could trigger a cascading effect across the broader marketplace.
Cointelegraph also notes that the dispute highlights an unresolved split between the CFTC and nearly two dozen state regulators over jurisdiction for prediction markets. Separately, Cointelegraph reports CFTC Chair Michael Selig said on Fox Business that it is “critical” for the agency to maintain authority over prediction markets.