Full Breakdown
CFTC Orders Kalshi to Remain Operational Amid New York Attorney General Lawsuit
8/16/2026, 6:53:14 AM
Core Event
The Commodity Futures Trading Commission (CFTC) invoked its emergency authority under the Commodity Exchange Act to require prediction-market platform Kalshi to continue trading nationwide. The order came after New York Attorney General Letitia James filed a lawsuit alleging that Kalshi operates as an unlicensed gambling business and seeking a restraining order and at least $36 billion in damages.
Legal Conflict
Attorney General James’ petition treats Kalshi’s event contracts as gambling and asks courts to bar the platform from offering such contracts across the United States. In response, the CFTC argued that Kalshi’s exchange-style matching of bids and offers across state lines constitutes an interstate financial market, not gambling. The agency has also initiated legal actions against nine other states and filed amicus briefs in the Sixth and Ninth Circuits and before the Supreme Judicial Court of Massachusetts. President Donald Trump has publicly supported the CFTC’s position.
Official Statements & Responses
CFTC Chairman Michael Selig criticized the New York suit, saying the state is attempting to halt the market before a final judicial ruling and that “New York has no business regulating these interstate financial markets.” The commission emphasized that its emergency authority permits it to keep Kalshi operating while the dispute proceeds.
A federal judge in New York denied Kalshi’s request for a preliminary injunction on July 7 and rejected its request for protection pending appeal on July 27. Separate state actions have limited Kalshi’s offerings: Michigan has restricted its sports markets, and Washington secured a preliminary injunction against the platform in July.
Verbatim Quotes
- “New York has no business regulating these interstate financial markets,” — Michael Selig, CFTC chairman
Implications
The CFTC’s order underscores a federal stance that prediction markets like Kalshi fall under securities regulation rather than state gambling law. The outcome of James’ lawsuit could shape how states address emerging financial-technology platforms and may influence future regulatory coordination between federal and state authorities.
