Odaily Planet Daily reports: U.S. District Court Judge Vernon D. Oliver in Connecticut denied Kalshi’s application for a preliminary injunction, ruling that its sports event contracts do not constitute swaps under the Commodity Exchange Act, and therefore the CFTC has not acquired exclusive jurisdiction. The ruling stated that sports event contracts account for 80% to 90% of the contracts listed and revenue on Kalshi’s platform, and the CFTC has never reviewed any of these contracts under its specific rules. Oliver determined that event outcomes constitute event results rather than independent events. Coinbase Financial Markets also lost its case on the same grounds; it offered Kalshi contracts via its platform in January as a futures commission merchant, not as a designated contract market, and Connecticut had not previously issued it a cease-and-desist order. At the February hearing, Kalshi was valued at approximately $11 billion and had around 24,000 users in the state. (Bitcoin.com News)
U.S. Federal Judge Rules Kalshi Sports Contracts Not Swaps; CFTC Lacks Exclusive Jurisdiction
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Summary
A U.S. federal judge in Connecticut ruled that Kalshi’s sports contracts are not swaps under the Commodity Exchange Act, denying the platform’s request for a preliminary injunction. The court found that the CFTC lacks exclusive jurisdiction over these contracts, which constitute 80% to 90% of Kalshi’s offerings. Judge Vernon D. Oliver noted that the CFTC has never reviewed any of these contracts under special rules. Coinbase Financial Markets also received a similar ruling in a related case. Kalshi, valued at $11 billion in February, operates under evolving cryptocurrency regulations and developments in Federal Reserve policy.
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