CFTC Blocks Kalshi from Liquidating Michigan Users' Sports Event Contracts
2026-07-16 04:33
Odaily Planet Daily News The U.S. Commodity Futures Trading Commission (CFTC) on Tuesday suspended an emergency rule by Kalshi, preventing it from forcibly liquidating open sports event contracts held by certain Michigan residents, and requiring Kalshi to follow normal procedures to fulfill related transactions.
Kalshi submitted the emergency rule on July 12, after the Ingham County Circuit Court in Michigan orally requested it to close some positions. A letter dated July 6 stated that the related transactions must be voided, canceled, and refunded.
The dispute began in March, when Michigan Attorney General Dana Nessel and the Michigan Gaming Control Board sued Kalshi, alleging that its sports event contracts constituted unlicensed internet sports betting. Kalshi argues that the relevant 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 transactions will be honored and could cause significant market disruption. CFTC Chairman Michael Selig stated that a state government cannot force a designated contract market to violate its obligations.
Kalshi submitted the emergency rule on July 12, after the Ingham County Circuit Court in Michigan orally requested it to close some positions. A letter dated July 6 stated that the related transactions must be voided, canceled, and refunded.
The dispute began in March, when Michigan Attorney General Dana Nessel and the Michigan Gaming Control Board sued Kalshi, alleging that its sports event contracts constituted unlicensed internet sports betting. Kalshi argues that the relevant 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 transactions will be honored and could cause significant market disruption. CFTC Chairman Michael Selig stated that a state government cannot force a designated contract market to violate its obligations.
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