Odaily Planet Daily Report: On Tuesday, the U.S. Commodity Futures Trading Commission (CFTC) suspended Kalshi’s emergency rule that sought to force the liquidation of open sports event contracts held by certain Michigan residents, requiring Kalshi to honor its trades through standard procedures. Kalshi submitted the emergency rule on July 12, following an oral directive from the Ingham County Circuit Court in Michigan to close certain positions and a July 6 letter explicitly stating that the relevant trades must be voided, canceled, and refunded. The dispute originated in March, when Michigan Attorney General Dana Nessel and the Michigan Gaming Control Board sued Kalshi, alleging that its sports event contracts constituted unlicensed online sports betting. Kalshi contends that its products are federally regulated derivatives under the Commodity Exchange Act. The CFTC stated that allowing Kalshi’s emergency rule to take effect could undermine confidence that completed derivatives trades will be honored and cause significant market disruption. CFTC Chair Michael Selig said that state authorities cannot compel a designated contract market to violate its obligations.
CFTC Blocks Kalshi from Liquidating Michigan Users' Sports Event Contracts
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Summary
On-chain news broke on Tuesday as the U.S. Commodity Futures Trading Commission blocked Kalshi from liquidating sports event contracts held by Michigan users. The CFTC ordered trades to continue under standard procedures. The dispute began in March when Michigan officials sued Kalshi, alleging its contracts constituted unlicensed sports betting. Kalshi countered that they are derivatives regulated under the Commodity Exchange Act. The CFTC warned that the emergency rule could undermine confidence in derivatives and disrupt market stability. Crypto news continues to monitor regulatory developments shaping the sector.
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