Kalshi Klear filed a Regulation 40.5 request with the CFTC on September 22, 2026, the 'Event Contract Margin Framework,' asking to end the requirement that every event contract on the exchange be paid for in full. Under the proposal, institutional participants, either futures commission merchants or Kalshi Klear-approved self-clearing members meeting capital requirements, could post only part of a contract's value as collateral, with margin scaling down as a contract nears resolution and returning to full collateral at maximum-risk periods; all users would still need to qualify as 'eligible contract participants' under federal swap-trading thresholds. Sports and 'mention' and culture markets are excluded from margin eligibility. The filing also asks to shorten the default-liquidation window from the standard five days to one day, lowering the margin required, with Kalshi's justification for the shorter window redacted in the public filing. The CFTC has 45 days to review before the rule change would take effect.
Commodity Futures Trading Commission
Federal — Designated Contract Markets
Primary federal regulator for event contracts listed on Designated Contract Markets under the Commodity Exchange Act. Administers the Section 5c(c)(5)(C) review framework and the Regulation 40.11 self-certification process.
The CFTC's Division of Market Oversight issued a staff advisory on September 22, 2026 (CFTC Staff Letter 26-27) stating that event contracts settling on a person's spoken words, event attendance, or other discrete individual conduct — so-called 'mention markets' — are presumptively susceptible to manipulation under Core Principle 3, unlike contracts tied to election results, economic data, or independently scored sporting outcomes. The advisory does not ban the contracts or create a new binding rule, but tells designated contract markets that Part 40 self-certification is no longer sufficient: exchanges must instead demonstrate, before listing, what constrains the person whose conduct determines the outcome, who could influence that person, how conduct is verified, and what trading restrictions, position limits, and surveillance apply. Staff cited two recent CFTC settlements as the backdrop: a July 31, 2026 order against George Santos over misrepresented State of the Union attendance, and an August 28, 2026 order against former White House teleprompter operator Gabriel Perez, who traded on advance access to presidential speeches. Kalshi is the primary operator of mention-market contracts and is named throughout the advisory's enforcement history; the guidance raises the bar for any DCM listing similar products going forward.
Kalshi and Coinbase each filed proposals with the CFTC and SEC on September 18, 2026 to list perpetual futures on individual US stocks, including Apple, Tesla, Microsoft, Nvidia, and Amazon; Kraken parent Payward's Bitnomial Exchange filed a similar proposal covering ten equities the following day. Kalshi's contracts would be cleared through its own CFTC-registered clearinghouse, Kalshi Klear, extending the perpetual-futures format the CFTC already approved for Kalshi's crypto and precious-metals contracts (upd-cftc-061) into single-name equities for the first time. The filings follow the CLARITY Act's September 15 collapse in the Senate and sharpen the SEC-versus-CFTC jurisdiction question Citadel Securities raised with both agencies on September 10 (upd-sec-028), warning that CFTC self-certification could let an equity-linked perpetual trade on leverage while the underlying stock market is closed.
The CFTC's Division of Market Oversight issued a staff no-action letter (Staff Letter 26-25, September 17, 2026, comparable to the prior Staff Letter 26-09) stating it will not recommend enforcement against providers of 'passive software' that connect users to registered futures commission merchants, introducing brokers, and designated contract markets, for failing to register as an introducing broker or associated person, subject to specified conditions. The Tunica-Biloxi Tribe of Louisiana announced September 18 that its new subsidiary, SaltTrade Derivatives, will rely on that relief to operate the first tribal-nation prediction-market app, built on Kalshi's infrastructure, without registering as an introducing broker. Kalshi CEO Tarek Mansour published an open letter the same day encouraging other tribes to enter similar partnerships, an overture that stands in contrast to Kalshi's active IGRA litigation with other tribes, including the September 16 Ninth Circuit ruling for California's Blue Lake Rancheria and Chicken Ranch Rancheria (law-catribes-v-kalshi-9th).
The CFTC held a listening session on September 15, 2026 with representatives of 17 tribal gaming organizations to discuss prediction markets and the agency's proposed event-contract rule. Indian Gaming Association Chair David Z. Bean said Chairman Michael Selig 'sat mostly silent and refused to discuss his proposed rule,' and National Congress of American Indians President Mark Macarro said tribal nations 'deserve a seat at the table' on policies affecting their sovereignty. Tribal leaders characterized the session as falling short of the government-to-government consultation federal law requires, distinct from the CFTC's September 17 no-action letter and the Tunica-Biloxi/Kalshi partnership announced the same week (upd-cftc-067).
Kalshi began trading CFTC-cleared perpetual futures on gold and silver the week of September 10, 2026, following a July filing. The cash-settled, non-expiring contracts price off Pyth Network feeds and trade continuously, including weekends and holidays, extending the perpetual-contract format the CFTC first approved for Kalshi's bitcoin perpetual (BTCPERP) in May 2026 into a non-crypto asset class for the first time. Kalshi chief risk officer Udesh Jha cited investor demand for metals exposure tied to inflation; the company has separate, still-pending CFTC filings for equity-index, copper, and currency perpetuals.
Kalshi removed betting markets tied to athlete injury durations from its app around September 1, 2026, after a source at the CFTC told Sportico the agency asked it to do so; the contracts had drawn at least hundreds of thousands of dollars in wagers on the health status of players such as Luka Doncic, Anthony Edwards, and Malik Nabers. Polymarket had already pulled comparable NFL player-availability contracts at the CFTC's request around August 31, while Kalshi initially kept similar 'will player compete' contracts live before also standing down. The requests follow the CFTC's June NPRM, which stated a preliminary view that sports-event-contract rules should generally bar contracts tied directly to player injuries, citing manipulation risk and the exposure of sensitive medical information; no formal order or rule has issued, and both companies' contracts remain unauthorized-injury-market withdrawals made informally rather than under compulsion.
The Hyperliquid Policy Center and TradeXYZ submitted a comment letter on August 26, 2026 responding to the CFTC's June request for comment on crude oil perpetual contracts and 24/7 trading, urging the Commission to adopt a technology-neutral, principles-based regulatory framework rather than product-specific rules, and seeking clarification on business-day timing requirements for continuously traded contracts. The letter frames perpetual futures as complementary to, not replacements for, traditional dated futures contracts. No CFTC response was reported; the group said it intends to continue engaging with the Commission and staff.
At the CFTC's first Innovation Advisory Committee meeting on August 20, 2026 — the prediction-markets session previewed in PR 9283-26 (upd-cftc-059) — CME Group CEO Terrence Duffy said sports and geopolitical event contracts are vulnerable to manipulation, citing self-certified contracts tied to Trump's State of the Union remarks and a potential Maduro ouster, and stated "there are definitely people that are manipulating these contracts." Chairman Michael Selig countered that the products Duffy cited were listed offshore, not on CFTC-regulated DCMs, calling the claim "fake news," but also said the agency expects to propose amendments to the rules governing how DCMs list event contracts and to strengthen retail consumer protections, acknowledging "we've heard the concerns of public commenters about inadequate consumer protections for retail." Kalshi COO Luana Lopes Lara publicly sparred with Duffy over whether CME's own markets have faced manipulation and over compliance-staff efficiency. No rule text, docket, or timeline was released; Selig's remarks signal a forthcoming DCM event-contract listing NPRM rather than a completed action.
At an August 19 White House meeting with crypto and prediction-market executives (Coinbase, Ripple, Nasdaq, Robinhood, Kraken, ICE), President Trump said "I understand Mike [Selig] is also working to bring Hyperliquid into the United States in a fully compliant and legal fashion," referring to CFTC Chairman Michael Selig. No formal regulatory designation, timeline, or filing accompanied the remark; Selig has previously said in a June interview that the agency's goal is to create a compliant path for onchain perpetual-futures platforms to operate domestically. HYPE token rose roughly 17% in the following 24 hours. Hyperliquid's HIP-4 prediction-market protocol currently operates entirely outside the CFTC-regulated perimeter that governs every DCM on this platform.
KalshiEX filed with the CFTC to list two new perpetual futures contracts: US500, tracking the MerQube US Large Cap Index of the 500 largest U.S. companies, and COPPERPERP, tracking spot copper prices via the Pyth Network XCU-USD feed. The filing extends Kalshi's perpetuals line beyond the crypto-only BTCPERP contract the CFTC approved in May 2026 (upd-cftc-045) into equity-index and commodity underlyings for the first time. That May approval already drew a June 2026 lawsuit from CME Group alleging the CFTC exceeded its authority under the Commodity Exchange Act (law-cme-v-cftc); an expansion into equity-index and commodity perps raises the stakes of that dispute by moving Kalshi further into products historically listed on CME's own exchanges.
Chairman Michael Selig announced the agenda (PR 9283-26) for the inaugural meeting of the CFTC's Innovation Advisory Committee on August 20 in Washington, covering crypto assets, artificial intelligence, and a dedicated session titled "Prediction Markets: Innovation, Jurisdiction, and the Future of Event Contracts." The release sets no new rules or deadlines; the meeting will be livestreamed, with public comments accepted through Regulations.gov until August 27.
Following the July disclosure that Donald Trump's longtime teleprompter operator profited by wagering on Kalshi contracts tied to specific words the president would or would not say during public remarks — trades Kalshi's own surveillance flagged and referred to federal authorities — the CFTC has opened a review of "mention markets," contracts settling on whether a public figure utters a specific word, examining whether the category is "readily susceptible to manipulation" under the core principles governing designated contract markets. Kalshi has removed mention-style contracts from its sports offerings "until further notice" while continuing to list them for political events, corporate earnings calls, and television newscasts; Polymarket offers comparable mention markets only on its unregulated offshore site, not its CFTC-regulated Polymarket US platform. Spokespeople for both Kalshi and the CFTC declined to comment on the record, and no formal complaint or rule proposal has been filed as of this report.
The CFTC's Division of Market Oversight issued an advisory (PR 9282-26, Staff Letter No. 26-23) on August 12 addressing what it called an increasing number of incentive-program rule filings submitted under CFTC Regulation 40.6(a) — particularly those tied to event-contract products — that contain procedural or substantive deficiencies, hampering staff review of whether designated contract markets gave proper notice and assessed compliance with core principles. The advisory sets out expectations for market-maker, liquidity, and trading-incentive program submissions under Regulations 40.5 and 40.6, covering both initial filings and amendments, but does not name individual exchanges or set a compliance deadline.
The CFTC's Division of Market Oversight and Market Participants Division issued a letter (PR 9278-26) cautioning DCMs, FCMs, and introducing brokers listing or soliciting event contracts against displaying prices using American-style (moneyline) odds, finding the bookmaker-style plus/minus format "is likely to mislead market participants" about the product's nature and may obscure market-depth signals. The letter, which cites research linking moneyline-style odds formatting to greater risk-taking, instead directs firms to display pricing in nominal or percentage terms reflecting market pricing, and gives recipients until August 31, 2026 to confirm receipt.
The CFTC issued an NPRM (PR 9274-26) proposing conflict-of-interest rules (amending Parts 37-39 and Regs 1.52/1.55) for market structures where an exchange also owns an affiliated market maker. The proposal would bar the affiliate from seeing non-public order flow or positions, ban preferential fees or matching priority, and require separation of staff, technology, and office space — a company could own a market maker on its own exchange but not a directional proprietary-trading arm. Trade press frames this as targeting the vertically integrated model used by Kalshi and Polymarket. 60-day comment period.
July 27, 2026 was the deadline for public comments on the CFTC's proposed rule (noticed June 10, 2026) establishing a three-step framework for evaluating whether event contracts involve gaming, war, assassination, or other public-interest-restricted activity. Multicoin Capital and the Hyperliquid Policy Center filed a joint comment letter backing exclusive CFTC federal jurisdiction and urging published reasoning for contract approvals and rejections; Coinbase filed a similar letter July 28.
The CFTC's Division of Market Oversight issued Staff Advisory No. 26-22 (PR 9273-26), reminding designated contract markets that broad, template-style self-certifications combining multiple event-contract variants under one filing are improper under Commission Regulation §40.2, and requiring terms, settlement methodology, and compliance analysis for each contract permutation (closely related contracts may still be certified together as a class). It is the second such warning in 2026 (after CFTC Letter 26-08, March 2026), issued three days before the July 27 comment-period close on the CFTC's broader prediction-markets rulemaking (upd-other-044).
The CFTC issued Press Release 9267-26 staying KalshiEX's own emergency rule change and ordering the company, under the Commission's emergency authority (CEA §8a(9)), to fulfill open Michigan-related trades rather than cancel them as an Ingham County Circuit Court order had directed. Multiple outlets noted this was the first use of the CFTC's emergency authority in 46 years, opening a 90-day Commission review with a 30-day comment window.
Bloomberg and CNBC reported the CFTC is conducting an ongoing investigation into Polymarket's business and social-media marketing practices, broader in scope than the paid-influencer campaign first reported by the WSJ, and coming days after the Curtis-Schiff Senate letter (upd-other-043).
The CFTC issued an NPRM (PR 9261-26, published in the Federal Register July 1, 2026) proposing that fully collateralized event contracts — the Kalshi/Polymarket-style category that has operated under CFTC staff no-action relief since 2017 — report under Parts 15-18 rather than the standard Parts 38/39/43/45 framework used by conventional futures and swaps.
On June 23, 2026, the CFTC filed a declaratory-judgment and injunctive complaint in the U.S. District Court for the Eastern District of Kentucky against Gov. Andrew Beshear, AG Russell Coleman, Department of Revenue Commissioner Thomas B. Miller, and the Kentucky Horse Racing and Gaming Corporation. The suit challenges two simultaneous Kentucky actions: (1) the AG's June 17, 2026 state-court enforcement suits against KalshiEX LLC and Polymarket US for alleged unlicensed sports wagering, and (2) a 14.25% excise tax on all prediction-market transaction fees enacted by the Kentucky General Assembly in April 2026 and already challenged by industry plaintiffs in Coalition for Prediction Markets v. Kentucky. The CFTC seeks a declaratory judgment that both the enforcement suits and the excise tax are preempted by the Commodity Exchange Act, and a permanent injunction barring enforcement of either. Chair Selig stated: 'Kentucky is the latest state attempting to shut down federally-regulated event contracts. The CFTC is firmly committed to maintaining its exclusive jurisdiction over prediction markets.' Kentucky becomes the ninth state sued by the CFTC in 2026 — after Arizona, Connecticut, Illinois, Minnesota, New Mexico, New York, Rhode Island, and Wisconsin — and is the first state with a Republican attorney general to face a CFTC federal preemption suit. The CFTC's brief argued the 14.25% levy 'essentially makes it impossible for prediction markets to operate in Kentucky' and operates as a functional ban rather than a genuine revenue measure.
On June 18, 2026, the CFTC filed an amended complaint and a motion for preliminary injunction in its existing Northern District of Illinois lawsuit (originally filed April 2, 2026, PR 9206-26), adding a direct challenge to the per-wager transaction tax Gov. JB Pritzker signed into law that same day as part of the FY2027 omnibus budget (SB 3019). The tax imposes a fee of 1.75% on each sports-event-contract exchange wager for an operator's first 5 million wagers per fiscal year, rising to 3.5% on each wager thereafter; the regime takes effect July 1, 2026. The CFTC argues that, at the 3.5% tier, the levy meets or exceeds the per-trade fees designated contract markets charge their own users, effectively constituting an outright ban on DCM operations rather than a genuine revenue measure, and that the Commodity Exchange Act preempts state-level taxation of federally regulated event contracts. The PI motion creates an urgent deadline: if not ruled upon before July 1, the tax will take effect against all CFTC-registered operators active in Illinois. This is the first time the CFTC has challenged a prediction-market-specific per-wager transaction tax in federal court — a legal theory distinct from the state cease-and-desist enforcement preemption arguments in its eight prior state suits — and runs parallel to the Coalition for Prediction Markets' challenge to Kentucky's 14.25% excise tax (law-coaltn-v-ky). Chairman Selig called the Illinois tax regime "an attempt to drive federally regulated prediction markets out of the state through discriminatory taxation rather than outright prohibition."
On June 16, 2026, the CFTC granted Designated Contract Market registration to Ludlow Exchange LLC, the CFTC-registered entity backing the Novig sports prediction market. The approval, completed in under seven months, allows Novig to offer federally regulated sports event contracts across all 50 states under a single CFTC oversight framework. Novig, which surpassed $5 billion in cumulative trading volume prior to the designation, operates a peer-to-peer model in which users trade directly against each other rather than against a house book. The approval is the second sports-native DCM designation in five days, following ProphetX's DCM and DCO approvals on June 11, 2026 (upd-cftc-047), and reflects the CFTC's continued acceleration of its DCM review pipeline. The approval gives Novig the same federal preemption arguments against state gaming regulators as Kalshi and other CFTC-registered DCMs.
On June 12, 2026, the CFTC filed a declaratory-judgment and injunctive suit (PR 9251-26) against New Mexico in the U.S. District Court for the District of New Mexico, seeking to block the state from enforcing its Gaming Control Act against CFTC-registered prediction-market operators. The action follows New Mexico AG Raúl Torrez's June 4 state-court suit against KalshiEX LLC (law-nm-ag-v-kalshi), which alleged Kalshi operated an unlicensed sportsbook and permitted users as young as 18 to participate. The CFTC argues the Commodity Exchange Act grants it exclusive jurisdiction over event contracts listed on designated contract markets, preempting state gambling statutes. New Mexico is the eighth state the CFTC has sued in 2026, after Arizona, Connecticut, Illinois, New York, Wisconsin, Minnesota, and Rhode Island. Chairman Selig stated the CFTC has "clear and longstanding exclusive jurisdiction to regulate event contracts and the prediction markets on which they trade under the Commodity Exchange Act."
On June 11, 2026, the CFTC approved ProphetX's applications for registration as both a Designated Contract Market (DCM) and a Derivatives Clearing Organization (DCO), making it the first sports-native, directly clearing prediction market exchange in the United States. The dual registration — which ProphetX had been pursuing since filing both applications on November 10, 2025 — allows the platform to trade, clear, and settle event-based sports contracts on a single vertically integrated venue under comprehensive CFTC oversight, without relying on an external clearinghouse. ProphetX, which began as a UK-licensed peer-to-peer sports event trading marketplace in 2018, pivoted away from a sweepstakes model in 2025 to pursue full CFTC regulation. The approval distinguishes ProphetX from existing DCMs such as KalshiEX and Robinhood Derivatives, which clear through the Options Clearing Corporation or third-party DCOs. ProphetX's product strategy centers on an RFQ-based parlay mechanism for sports event contracts.
The CFTC released a 267-page Notice of Proposed Rulemaking on June 10, 2026, establishing the first comprehensive federal framework for evaluating which event contracts may be listed on registered DCMs. The NPRM follows the March 2026 ANPRM (PR 9194-26) and OIRA review (upd-cftc-044). Under the proposed three-part test, the Commission determines whether a product qualifies as an event contract; whether it involves a category Congress directed for scrutiny — gaming, war, terrorism, assassination, or unlawful conduct; and whether it is contrary to the public interest, weighing information-aggregation benefits, manipulation risk, and economic utility. Sports-related contracts on final scores, point differentials, win-loss records, tournament advancement, and player statistics are generally permitted. Micro-event contracts tied to single plays — a single baseball pitch, a single hockey shot, a single foul — and contracts on player injuries, officiating decisions, physical altercations, and precollege athletics would be prohibited. Contracts involving war, terrorism, and assassination would be subject to heightened scrutiny and would generally be barred. The Commission will accept public comment for 45 days following Federal Register publication. Chair Selig stated the proposal "gives the Commission a durable, transparent framework to identify the contracts Congress directed us to scrutinize while letting legitimate markets move forward."
On May 29, 2026, the CFTC issued an Order for Approval (PR 9240-26) permitting KalshiEX LLC to list the BTCPERP Contract — a perpetual contract referencing the spot price of bitcoin — as a futures contract on a US-regulated exchange, the first of its kind domestically. Kalshi submitted the contract under Regulation 40.3 on May 28; the Commission determined it complies with CEA core principles and Part 38. Simultaneously, the Commission issued a policy statement (PR pr-9242-26) describing its views on the listing of perpetual contracts, noting that the case-by-case Regulation 40.3 review process applies to perpetual contracts referencing asset classes not covered by the Order. The package follows CFTC Staff Letter No. 26-16 (PR 9239-26), a 24/7 trading advisory issued the same day. The BTCPERP approval signals Kalshi's material expansion from event contracts into crypto derivatives and positions a CFTC-regulated DCM to compete with offshore perpetual-futures venues that handle roughly $86 trillion in annual volume.
The CFTC forwarded a proposed rulemaking on event contracts to the Office of Management and Budget for mandatory White House review, as reported May 27, 2026. The rule follows the March 2026 ANPRM (PR 9194-26) that drew more than 3,000 public comments on insider trading, contract prohibitions, and oversight architecture. OIRA review is a required step before a Notice of Proposed Rulemaking can be published in the Federal Register; no details of the rule's substance have been disclosed. The rulemaking, if finalized, would constitute the first comprehensive federal framework for event contracts and could provide statutory preemption footing against pending state legislation in Minnesota, Rhode Island, and other states actively pursuing enforcement.
Hours after Governor Walz signed SF 4760, the CFTC filed a declaratory-judgment and injunctive suit in the District of Minnesota (PR 9233-26) seeking a preliminary injunction to block the law before its August 1 effective date. Chairman Selig called it "the most aggressive move by a state to shut down CFTC-regulated markets and undermine the federal regulatory regime set up by Congress more than 50 years ago," noting the law would criminalize contracts on weather, crops, and war in addition to sports. Minnesota becomes the sixth state the CFTC has sued in 2026, after Arizona, Connecticut, Illinois, New York, and Wisconsin.
The Divisions of Market Oversight and Clearing and Risk issued a supplemental no-action letter granting blanket relief from Parts 43 (real-time public reporting), 45 (swap data recordkeeping & reporting), and Regulations 38.8(b), 38.10, 38.951, and 39.20(b)(2) for fully collateralized binary- and variable-payout event contracts. Initially issued for Gemini Titan / Gemini Olympus but designed as a streamlined market-wide framework other DCMs/DCOs can join without bespoke letters. Major regulatory-burden reduction for all prediction-market DCMs.
In KalshiEx LLC v. Schuler et al., the CFTC filed a Sixth Circuit amicus brief asserting exclusive federal jurisdiction and warning that "Ohio's jurisdictional overreach into the Commission's sphere threatens regulatory upheaval." The filing follows the OCCC's $5M fine notice (April 14, 2026) and the March 2026 district-court denial of Kalshi's injunction by Chief Judge Sarah Morrison.
Chairman Selig keynoted FINRA's annual conference, using the appearance to confirm the CFTC is in active talks with every major US professional sports league following the March 2026 MOU with MLB, and to argue prediction markets and sportsbooks are "two separate things — markets versus entertainment." Same-day remarks to Axios reinforced that the CFTC will not defer to state courts.
US District Judge Michael T. Liburdi (D. Ariz.) converted the April 10 TRO into a preliminary injunction blocking Arizona AG Kris Mayes from prosecuting the Maricopa County criminal case and from enforcing state gambling laws against CFTC-registered DCMs. The court rested its decision on three independent preemption grounds (field, conflict, and obstacle preemption). Some coverage characterized the order as "permanent."
At Consensus Miami, Chairman Selig defended CFTC's exclusive authority over event-based contracts (sports and political markets), said state actions amount to undermining federal law, and predicted the jurisdictional battle will reach the US Supreme Court. He reiterated the CFTC has already sued "five or six states."
The Divisions of Market Oversight and Clearing and Risk issued a no-action letter modifying CFTC Letter 25-26 to add Bitnomial Clearinghouse as a covered DCO — allowing Railbird to clear Railbird Contracts through Bitnomial on the same terms as QC Clearing — and to remove Condition 6 prohibiting intermediation given Railbird's amended DCM Order.
CFTC issued a Request for Comment on modifications to the Commitments of Traders Reports program — including whether prediction-market platforms now offering agricultural, natural-gas, and lithium contracts should file COT reports like CME/ICE. The action is explicitly driven by Kalshi's commodities expansion. Comments due June 4, 2026.
The CFTC's Advance Notice of Proposed Rulemaking on event contracts (PR 9194-26, published March 16) closed with over 1,500 public comments — the next-highest CFTC rulemaking this year drew nine. Submissions came from operators, sports leagues (NFL, NBA, MLB, PGA), players unions, tribal nations, state AGs, and consumer-protection groups. The CFTC has indicated it will use comments to inform future agency action.
The CFTC announced that all electronic public-comment submissions on rulemakings and comment requests issued on or after April 28, 2026 must go through Regulations.gov instead of comments.cftc.gov. The change integrates CFTC dockets with the federal Unified Agenda and is relevant for ANPRM follow-up and any forthcoming event-contracts NPRM.
The CFTC filed federal suit against Wisconsin four days after AG Josh Kaul's civil complaints, seeking declaratory and injunctive relief to block enforcement of state gambling laws against CFTC-registered DCMs. Wisconsin becomes the fifth state CFTC has sued (after AZ/CT/IL on April 2 and NY on April 24). Chairman Selig: "If you interfere with the operation of federal law in regulating financial markets, we will sue you."
The CFTC filed an amicus brief at the Massachusetts Supreme Judicial Court in Commonwealth v. KalshiEx LLC (No. SJC-13906), asserting exclusive federal jurisdiction over event contracts listed on CFTC-regulated DCMs. The filing coincided with a 38-state AG coalition amicus brief filed the same day on the opposite side.
The CFTC filed suit in the Southern District of New York to halt New York State's efforts to apply state gambling law against CFTC-registered designated contract markets. The complaint targets the October 2025 cease-and-desist to KalshiEX, civil suits against Coinbase Financial Markets and Gemini Titan, and asserts CEA preemption. New York becomes the fourth state CFTC has sued, after Arizona, Connecticut, and Illinois (April 2, 2026).
The CFTC filed a civil complaint in the SDNY against active-duty US Army service member Gannon Ken Van Dyke, alleging he used classified non-public information about Operation Absolute Resolve (the operation to capture former Venezuelan President Nicolás Maduro) to buy more than 436,000 "Yes" shares on Polymarket for over $404,000 in profits. SDNY simultaneously unsealed a parallel criminal indictment. This is the CFTC's first-ever insider-trading enforcement action involving an event contract and operationalizes the Feb 25 advisory.
Following an internal compliance review, KalshiEX suspended three political candidates from its platform for five years and imposed fines ranging from $539 to more than $6,200 for trading contracts on their own campaigns. The sanctioned candidates are Mark Moran (VA, independent), Matt Klein (MN-2, Democrat), and Ezekiel Enriquez (TX-21, Republican). The action operationalizes the CFTC Enforcement Division's February 25, 2026 insider-trading advisory.
Kalshi and Polymarket announced parallel launches of perpetual futures markets on CFTC-regulated venues, beginning with BTC- and equity-linked perps at up to 10x leverage. Polymarket is routing the product through its recently amended DCM registration (QCX LLC). The expansion pulls both operators into a derivative category historically reserved for offshore crypto exchanges and sharpens the Commission's rulemaking stakes beyond the existing event-contract debate.
A 2-1 panel of the U.S. Court of Appeals for the Third Circuit affirmed Kalshi's preliminary injunction against the New Jersey Division of Gaming Enforcement, holding that Kalshi's sports event contracts are "swaps" under the Commodity Exchange Act and that federal field and conflict preemption apply. The ruling is the first federal appellate decision on the preemption question.
The Commission filed three federal lawsuits seeking declaratory judgments and permanent injunctions against Arizona, Connecticut, and Illinois, arguing state cease-and-desist orders against Kalshi and other DCMs are preempted by the Commodity Exchange Act. On April 10, the District of Arizona granted a TRO barring Arizona from pursuing criminal charges against DCMs.
The Commission published an Advance Notice of Proposed Rulemaking and Division of Market Oversight Staff Advisory 26-08 addressing event contracts and prediction markets. The ANPRM seeks comment (due April 30, 2026) on core-principle application, public-interest prohibitions, and cost-benefit considerations; the advisory reiterates DCM obligations under Core Principles 3, 4, and 12.
The Division of Enforcement issued a Prediction Markets Advisory alongside two settled enforcement cases against Kalshi traders, identifying three categories of prohibited conduct: misappropriation-based insider trading under Section 6(c)(1) and Rule 180.1; pre-arranged/noncompetitive trading; and wash sales under Section 4c(a). One case involved a political candidate trading contracts on his own candidacy.
Chairman Selig formally withdrew the May 2024 proposed rulemaking that would have prohibited event contracts on elections, sports, gaming, and awards, and rescinded Staff Advisory 25-36. The Commission stated it would advance a new rulemaking "grounded in a rational and coherent interpretation of the Commodity Exchange Act."
The Senate confirmed Michael Selig as Chairman of the Commodity Futures Trading Commission following Caroline Pham's departure. Selig signaled a pro-prediction-markets agenda, including plans to withdraw the 2024 event contracts rulemaking and defend CFTC's exclusive jurisdiction in court.
The Division of Market Oversight issued coordinated no-action letters (including Letter 25-48) giving Polymarket US, Aristotle, Gemini, and LedgerX/MIAX relief from certain swap data reporting and recordkeeping rules for fully collateralized binary option transactions. Two letters also removed prior prohibitions on FCM intermediation.
The Commission issued an Amended Order of Designation for Polymarket US (the rebranded QCX LLC), granting full DCM status with permission to operate an intermediated platform. The order enables Polymarket to onboard brokerages and retail customers directly in the United States.
The CFTC's Division of Market Oversight and Division of Clearing and Risk jointly issued Staff Advisory 25-36, cautioning FCMs, DCMs, and DCOs about state-level regulatory risks for sports-related event contracts. The advisory expressly stated the Commission had not determined whether such contracts involve enumerated prohibited activities under the CEA.
The CFTC and SEC held a four-hour joint roundtable featuring industry, state gaming regulators, sports leagues, tribal organizations, and academics to examine event contracts and regulatory harmonization. Kalshi and Polymarket CEOs attended; written submissions exceeded 40 entities.
Aristotle, the operator of PredictIt, received CFTC approval to operate as both a Designated Contract Market and a Derivatives Clearing Organization, ending PredictIt's long-running reliance on the 2014 no-action letter. The new exchange was expected to open for trading in October 2025.
Polymarket agreed to acquire QCX LLC (CFTC-registered DCM) and QC Clearing LLC (DCO) for $112 million, providing a regulatory pathway back into the U.S. market after its 2022 enforcement settlement. The deal bypassed the multi-year greenfield DCM registration process.
The Department of Justice and the CFTC formally closed parallel civil and criminal investigations of Polymarket — which had been examining whether the offshore platform accepted U.S. users in violation of its 2022 settlement — without filing charges. The probe had included an FBI raid of CEO Shayne Coplan's apartment in November 2024.
The Commission voluntarily dismissed its appeal of the district court's ruling in favor of Kalshi's Congressional Control Contracts, leaving the pro-Kalshi decision intact. Both sides agreed to bear their own costs; Kalshi waived litigation claims. The dismissal effectively settled the federal question on political event contracts.
Kalshi filed its third Commodity Exchange Act preemption suit against a state regulator, targeting Maryland's cease-and-desist order over sports event contracts. The Maryland court later denied Kalshi's preliminary-injunction motion in August 2025, creating a split with earlier NJ and Nevada rulings.
Acting Chair Pham announced the Commission would convene a public roundtable approximately 45 days after closing a request for information on sports-related event contracts. The stated goal was to build an administrative record drawing from industry, gaming regulators, tribal organizations, and academics.
The Commission issued a formal request to Robinhood Derivatives LLC to withdraw customer access to the Pro Football Championship event contract (offered via Kalshi) two days after the retail rollout. Robinhood suspended the product but publicly criticized the Commission's reversal after prior engagement.
KalshiEX filed a Rule 40.2 self-certification for binary "Will the chosen team win?" contracts covering Super Bowl LIX and the AFC/NFC championship games. Trading launched January 23; reported volume exceeded $1.8 million within 24 hours and the CFTC declined to invoke a 40.11 review.
Following the inauguration of President Trump, Commissioner Caroline Pham was designated Acting Chair. Pham had dissented from the 2024 event contracts proposal and signaled a more accommodative stance toward prediction markets, event contracts, and financial innovation.
The Commission voted to commence a Regulation 40.11(c) review of Crypto.com's sports event contracts and requested a voluntary suspension of listing during the 90-day evaluation period. Crypto.com publicly declined the Commission's request to pause trading.
Crypto.com's CFTC-registered DCM subsidiary (Derivatives North America, formerly Nadex) listed binary yes/no contracts on the outcome of Super Bowl LIX, becoming the first platform to list sports event contracts on a nationwide basis. The contracts were structured with notional caps to align with CFTC rules.
KalshiEX submitted a Rule 40.2(a) self-certification for binary "Will this film win?" contracts on Academy Award outcomes — the first entertainment-awards event contracts listed on a U.S. DCM. The CFTC took no action to block the filing and the contracts were listed for trading.
The U.S. Court of Appeals for the D.C. Circuit denied the CFTC's emergency motion to stay the district court ruling pending appeal, finding the agency failed to show irreparable harm. The decision cleared Kalshi to list election contracts for the November 2024 U.S. elections — the first federally regulated election prediction market.
Judge Jia Cobb of the U.S. District Court for D.C. ruled that the CFTC exceeded its statutory authority in prohibiting Kalshi's Congressional Control Contracts, holding the contracts do not involve unlawful activity or "gaming" under Section 5c(c)(5)(C) of the Commodity Exchange Act. The decision vacated the CFTC's September 2023 disapproval order.
ForecastEx LLC, an Interactive Brokers affiliate, began operations as a CFTC-registered Designated Contract Market and Derivatives Clearing Organization for forecast contracts. The launch introduced a second intermediated venue for federally regulated event contracts focused on economic and climate outcomes.
Commissioner Summer Mersinger issued a dissent arguing the Commission's proposal exceeds its statutory authority under the Commodity Exchange Act and improperly substitutes the agency's judgment for that of market participants. She warned the rule would stifle innovation and drive activity to offshore venues.
The Commission voted 3-2 to issue a Notice of Proposed Rulemaking amending Regulation 40.11 to specify that event contracts referencing elections, sports outcomes, gaming, awards, terrorism, assassination, or war are contrary to the public interest and may not be listed on CFTC-registered DCMs. Commissioners Mersinger and Pham dissented.