CFTC order follows declaration of a market emergency by Kalshi
The US Commodity Futures Trading Commission has ordered Kalshi to continue its operations in New York, after Kalshi notified the Commission of legal action by the state.
Kalshi advised the CFTC of a market emergency in response to New York Attorney General Letitia James’ complaint against the exchange on July 31, which seeks a temporary restraining order and more than $36 billion in damages.
The CFTC said Tuesday that it has ordered Kalshi to continue its operations, in accordance with the Commodity Exchange Act’s core principles.
“New York intends to make event contract derivatives waste away under its iron curtain of state gaming laws before the courts get the chance to issue final rulings,” said CFTC Chairman Michael Selig. “Congress did not intend for derivatives exchanges to be regulated under a patchwork of state gaming laws.
“These are financial exchanges that offer financial instruments and operate across state lines. They match the bid from a resident of one state with the offer of a resident from another state and submit the trade to a clearinghouse that backstops the transactions of customers throughout the country,” added Selig. “New York has no business regulating these interstate financial markets. The Commission is required by law to ensure order in these markets, and that is what we have done today.”