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Federal judge bars Minnesota from enforcing prediction-market felony law
The ruling is limited to CFTC-designated contract markets, including Kalshi and Polymarket US, until the cases are decided on the merits.
A federal judge temporarily blocked Minnesota from enforcing a new felony law targeting prediction markets against certain federally regulated exchanges, days before the statute was set to take effect Aug. 1, according to CryptoSlate.
Judge Katherine Menendez granted preliminary-injunction motions filed by the CFTC, KalshiEX and QCX, the entity behind Polymarket US, preventing named Minnesota officials from enforcing Minn. Stat. § 609.7615 against CFTC-designated contract markets while the dispute proceeds to a final merits decision.
In her order, Menendez found the plaintiffs were likely to show that the Commodity Exchange Act expressly preempts parts of Minnesota’s law, citing the CFTC’s exclusive jurisdiction over swap transactions conducted on designated contract markets. She said the swap definition can include event contracts with a reasonably connected potential financial, economic or commercial consequence, but that a trader’s possible profit by itself is not enough.
The judge also signaled how the scope could narrow for a permanent injunction, pointing to markets tied to an upcoming Senate election, the World Cup winner, a LeBron James signing and Strait of Hormuz traffic as likely swaps, while questioning a 20-point-lead market and suggesting some Love Island USA and World Cup-announcer wording examples were unlikely to qualify. CryptoSlate noted the order does not expressly shield customers, independent advertisers or outside service providers, because it protects only CFTC-designated contract markets.