CFTC's emergency order requires Kalshi to continue operations, citing the risk of liquidating Bitcoin positions

The U.S. Commodity Futures Trading Commission (CFTC) requires the prediction market platform Kalshi to continue operating its exchange, executing in accordance with normal business practices and the core principles of the Commodity Exchange Act. The CFTC previously determined that New York's attempt to prevent the platform's operation constitutes a market emergency.

The CFTC stated that forcibly liquidating a Bitcoin price position that extends until the end of 2026 could trigger traders to simultaneously unwind Bitcoin and other asset positions, exposing arbitrageurs holding opposite positions to one-sided risk. The order also enumerates contracts such as federal funds rates, traffic in the Strait of Hormuz, and the timing of economic recessions. A ruling signed by Judge Vernon D. Oliver of the U.S. District Court for the District of Connecticut concluded that Kalshi's sports contracts do not constitute swaps; even if they were swaps, federal law would not take precedence over Connecticut's gambling regulations.