CFTC declares market emergency, orders Kalshi to continue to operate in New York
The Commodity Futures Trading Commission (CFTC) declared a market emergency and ordered KalshiEX, an event contract exchange, to continue operating in New York, despite a lawsuit from the New York Attorney General. The CFTC asserts its authority to ensure a uniform national market for derivatives, arguing against state-level regulation of these interstate financial markets.
Why it matters
This action highlights a significant jurisdictional conflict between federal and state regulators over the regulation of financial derivatives, potentially setting a precedent for how event contracts and other financial instruments are overseen across the U.S. financial landscape.
WASHINGTON — The Commodity Futures Trading Commission today exercised its emergency authority in response to KalshiEX, LLC’s notification of a market emergency and ordered the exchange to continue to operate in accordance with the Commodity Exchange Act’s Core Principles.
KalshiEX, LLC notified the Commission of the emergency after New York Attorney General Letitia James filed a complaint against the exchange in state court. In the lawsuit, filed on July 31, New York seeks a temporary restraining order prohibiting KalshiEX, LLC from offering all event contracts nationwide and more than $36 billion in damages.
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