CFTC Invokes Emergency Powers to Keep Kalshi Operating Amid $36 Billion New York Lawsuit
The CFTC used emergency federal authority to keep Kalshi operating nationwide after New York sued the prediction market platform for $36 billion. Here's what's confirmed.
What Happened
On August 11, 2026, the CFTC invoked emergency authority under Section 8a(9) of the Commodity Exchange Act to order Kalshi to continue operating nationwide, according to The Block. The move came after Kalshi warned the agency of an "imminent market emergency" following a New York lawsuit seeking to halt its operations in the state.
The New York Lawsuit
New York Attorney General Letitia James sued Kalshi on July 31, 2026, alleging the platform operates as an illegal gambling business under state law by offering sports-related prediction markets without a license from the New York State Gaming Commission. Per PYMNTS, the lawsuit seeks a temporary restraining order, restitution for users, profit disgorgement, and civil penalties totaling at least $36 billion. It also alleges Kalshi exposed New York residents, including minors under 21, to financial harm and avoided applicable taxes.
The CFTC's Response
CFTC Chair Michael Selig said New York "has no business regulating these interstate" markets, framing prediction markets as federally regulated derivatives products that fall outside state gambling law. The agency's emergency order lets Kalshi keep operating in New York while the broader legal dispute plays out.
Why This Is Bigger Than One Lawsuit
This isn't an isolated dispute. The CFTC has separately sued multiple states over the same jurisdictional question, arguing federal law preempts state gambling regulation of prediction markets. Kalshi has echoed that framing: a company spokesperson compared a state-level shutdown to cutting off a major exchange like Nasdaq in New York, arguing that market liquidity doesn't respect state lines.
What This Means
The core question, whether prediction markets are federally regulated financial products or state-regulated gambling, remains unresolved, and this case is one of several working through the courts at the same time. For now, the CFTC's emergency order keeps Kalshi operating nationwide, but the underlying jurisdictional fight is far from settled.
If you want to see how a platform operates under clear regulatory footing, you can explore Bitval directly.
This article is for informational purposes only and does not constitute financial or legal advice. It does not recommend using any specific prediction market or platform.
