According to CoinDesk, U.S. federal judge Aleta Trauger has temporarily blocked Tennessee from enforcing an injunction against prediction market operator Kalshi, allowing the platform to continue operating in the state during the court proceedings. Kalshi argues that as a designated contract market regulated by the U.S. Commodity Futures Trading Commission (CFTC), it should be protected by federal law and not subject to state gambling laws. Previously, Tennessee regulators had ordered Kalshi, Polymarket, and Crypto.com to stop offering sports event contracts to residents of the state, warning that violations could result in fines of up to $25,000 per occurrence. A preliminary injunction hearing is scheduled for January 26.
Federal Judge Halts Tennessee's Ban on Kalshi Prediction Market
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Summary
A U.S. federal judge has stopped Tennessee from enforcing its ban on the cryptocurrency-based prediction market platform Kalshi, allowing it to operate in the state during the ongoing legal review. Kalshi claims it is a contract market regulated by the CFTC and not subject to state gambling laws. Tennessee had previously ordered Kalshi, Polymarket, and Crypto.com to cease offering sports betting contracts, threatening fines of up to $25,000 for each violation. A hearing for a preliminary injunction is scheduled for January 26. The ruling could influence how risk-related assets like prediction markets are treated under federal versus state law.
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