Kalshi Wins Federal Backing — CFTC Orders Exchange To Disregard Michigan Court

The Commodity Futures Trading Commission (CFTC) stepped directly into Kalshi’s ongoing legal battle with state authorities on Tuesday, ordering the prediction market exchange not to comply with a Michigan court directive requiring it to cancel previously executed trades. 

The CFTC’s Emergency Order 

In its official statement, the CFTC said it exercised its emergency authority to stay an emergency rule change Kalshi had proposed in response to the Michigan court order, and simultaneously directed the exchange to fulfill its open trades rather than cancelling them. 

The commission grounded its intervention in the Commodity Exchange Act, which it said requires a uniform national market in derivatives transactions — one where registered exchanges cannot discriminate against residents of any particular state and where market participants must have impartial access. CFTC Chairman Michael Selig said: 

A state cannot force a DCM [Designated Contract Market] to violate its obligations, and federal law does not permit a DCM to discriminate against a state’s residents. Canceling trades that have already been executed is an unprecedented step that risks a cascading effect on the entire marketplace and undermines the certainty in contracting that is a necessary component of a functioning market. 

The CFTC also disclosed the full scale of its ongoing jurisdictional fight with state governments. Michigan is the first state to attempt to interfere directly with executed derivatives transactions, but it is far from the only one pushing against Kalshi and the commission’s authority. 

The CFTC has filed lawsuits against Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island, and Wisconsin, and has submitted legal briefs in the US Court of Appeals for the Sixth and Ninth Circuits as well as the Supreme Judicial Court of Massachusetts.

Kalshi Is Fighting the Same Battle In Almost Every State 

In March, Arizona filed criminal charges against Kalshi, accusing the platform of running an unlicensed gambling operation and offering illegal wagers tied to election outcomes. 

A Massachusetts judge went further in February, barring Kalshi from offering sports-related markets in the state entirely on public health and safety grounds. 

As CryptoDepth reported earlier this month, Judge Analisa Torres — the federal judge who presided over the Ripple Labs securities case — denied Kalshi a preliminary injunction in the Southern District of New York.

That ruling sent the case to the motion-to-dismiss stage and added to a growing list of court decisions that have gone against Kalshi as it fights the same battle across multiple states simultaneously.

Tuesday’s CFTC intervention is the clearest assertion yet that the commission views itself as the exclusive authority over prediction markets — and that it is prepared to use emergency powers to back that position when state courts push in the other direction.

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