{"id":76726,"date":"2026-08-12T20:11:54","date_gmt":"2026-08-12T20:11:54","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/cftc-cites-bitcoin-position-in-emergency-order-shielding-kalshi\/"},"modified":"2026-08-12T20:11:54","modified_gmt":"2026-08-12T20:11:54","slug":"cftc-cites-bitcoin-position-in-emergency-order-shielding-kalshi","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/cftc-cites-bitcoin-position-in-emergency-order-shielding-kalshi\/","title":{"rendered":"CFTC Cites Bitcoin Position in Emergency Order Shielding Kalshi"},"content":{"rendered":"<p><b>(Originally posted on : Bitcoin News )<\/b><br \/>\n<\/p>\n<div>\n<div class=\"@container mb-[25px] rounded-sm overflow-clip py-0.5 pr-0.5 pl-2.5 bg-success-100\">\n<div class=\"flex flex-col gap-m overflow-clip rounded-[6px] !bg-success-10 p-3 @[420px]:p-m\">\n<h2 class=\"m-0 flex items-center gap-s text-[19px] !text-[#1c1c1c] md:text-[20px]\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"16\" height=\"10\" viewbox=\"0 0 16 10\" fill=\"none\" class=\"shrink-0 text-success-100\" aria-hidden=\"true\"><path d=\"M1 1.5h14\" stroke=\"currentColor\" stroke-width=\"2.5\" stroke-linecap=\"round\"\/><path d=\"M1 8.5h10\" stroke=\"currentColor\" stroke-width=\"2.5\" stroke-linecap=\"round\"\/><\/svg><span>Key Takeaways<\/span><\/h2>\n<ul class=\"m-0 flex list-none flex-col gap-m pl-0\">\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">CFTC ordered Kalshi to keep operating after its Aug. 1 market-emergency notice.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">The order says forced liquidation of a bitcoin position could trigger other unwinds.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">A Connecticut judge rejected the swaps premise in a ruling docketed a day earlier.<\/span><\/li>\n<\/ul>\n<\/div>\n<\/div>\n<h2>Bitcoin Example Broadens Fight Beyond Sports Contracts<\/h2>\n<p>Countering New York\u2019s suit against the prediction market, the CFTC on Aug. 11 directed Kalshi to keep running its exchange under its normal practices and the Commodity Exchange Act\u2019s Core Principles. The <a href=\"https:\/\/www.cftc.gov\/media\/14471\/OGC_MarketEmergencyDeclarationOrder081126\/download\" target=\"_blank\" rel=\"noopener noreferrer\">emergency order<\/a> followed Kalshi\u2019s Aug. 1 warning that the state\u2019s requested restraining order could stop it from offering event contracts from New York altogether.<\/p>\n<p>The commission said New York\u2019s enforcement action amounted to a \u201cmajor market disturbance,\u201d calling the threat of a sudden shutdown \u201cexistential\u201d for regulated markets, traders, and its own jurisdiction. Because Kalshi is headquartered in New York, the CFTC said a ban on operating \u201cwithin or from\u201d the state could stop the exchange from serving anyone, anywhere.<\/p>\n<p>That claim rests on Kalshi\u2019s 2020 registration as a federally designated exchange, which the commission says makes its event contracts swaps under its exclusive control. Multiple states reject the premise, and so did a federal judge. In an opinion signed Aug. 7 and docketed Aug. 10, U.S. District Judge Vernon D. Oliver <a href=\"https:\/\/news.bitcoin.com\/igaming\/connecticut-judge-says-kalshi-sports-contracts-were-never-swaps\/\">held that Kalshi\u2019s sports contracts were never swaps<\/a>, so the CFTC\u2019s jurisdiction never attached. He added that even if they were swaps, federal law would not override Connecticut\u2019s gambling statutes. Connecticut is one of nine states the CFTC has sued to defend that jurisdiction.<\/p>\n<p>The order listed contracts on Federal Open Market Committee moves in the federal funds rate, Strait of Hormuz traffic, state droughts, recession timing, and whether a crypto asset will hit a specified price among the products that traders could lose. It then described a trader holding a Kalshi position on bitcoin\u2019s price at the end of 2026. A forced liquidation, the commission reasoned, could wreck that strategy and force the trader to unwind bitcoin and other holdings. An arbitrageur with an opposite position elsewhere could be left with one-way exposure he never wanted. Whether such <a href=\"https:\/\/www.bitcoin.com\/get-started\/defi-and-web3\/prediction-markets\/what-are-prediction-markets\/\" target=\"_blank\" rel=\"noopener noreferrer\">event contracts<\/a> count as swaps is the question courts have split on all year.<\/p>\n<p>State by state, the answers keep coming back differently. Two weeks earlier, U.S. District Judge Katherine Menendez identified contracts on a U.S. Senate election, the World Cup winner, and the reopening of Strait of Hormuz traffic as <a href=\"https:\/\/news.bitcoin.com\/igaming\/minnesota-judge-blocks-prediction-market-ban-but-says-some-contracts-arent-swaps\/\">likely to meet the federal swap definition<\/a> while blocking Minnesota\u2019s felony ban. She drew the line elsewhere, finding that markets on a reality-television winner and on words spoken by World Cup announcers lacked the financial consequence the statute requires.<\/p>\n<p>The commission also warned that shutdown risk would price a premium into every event contract, and a further premium into those listed by a New York exchange, creating arbitrage driven by enforcement risk rather than the events being traded. If New York could use gambling law to ban these products, it argued, it could target any CFTC-regulated derivative, futures included.<\/p>\n<p>Chairman Michael S. Selig said in the <a href=\"https:\/\/www.cftc.gov\/PressRoom\/PressReleases\/9281-26\" target=\"_blank\" rel=\"noopener noreferrer\">accompanying press release<\/a> that New York wanted event-contract derivatives to \u201cwaste away under its iron curtain of state gaming laws.\u201d A Kalshi spokesperson made <a href=\"https:\/\/www.theblock.co\/news\/regulation\/2026-08-11-cftc-flexes-emergency-authority-kalshi-operating-amid-new-york-lawsuit-411507\" target=\"_blank\" rel=\"noopener noreferrer\">a parallel argument<\/a> to The Block, saying that if Nasdaq shut down in New York, liquidity would dry up and trading would get harder for people across the country.<\/p>\n<p>The <a href=\"https:\/\/news.bitcoin.com\/regulation-and-legal\/ny-sues-kalshi-demanding-100k-fine-per-illegal-bet\/\">New York petition<\/a> seeks a permanent injunction, an accounting, restitution, disgorgement, damages, triple Kalshi\u2019s gain, and $100,000 for each unauthorized sports-wagering offer. Separately, the CFTC order cites a filing in the removed federal case seeking at least $36 billion in compensatory damages. Notably, that total does not appear anywhere <a href=\"https:\/\/ag.ny.gov\/sites\/default\/files\/court-filings\/new-york-v-kalshiex-llc-petition-2026.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">in the verified petition itself<\/a>, despite reporting to the contrary. The petition says Kalshi holds no New York gaming license, lets people aged 18 through 20 open accounts against a state minimum of 21, and has reported a $22 billion valuation on $178 billion in annualized volume. Kalshi\u2019s chief executive has <a href=\"https:\/\/news.bitcoin.com\/crypto-news\/casino-lobby-fueled-ny-lawsuit-against-kalshi-ceo-mansour-claims\/\">blamed casino-industry lobbying<\/a> for the suit.<\/p>\n<p>The emergency order was not the CFTC\u2019s first move against New York. The commission already has an injunction motion pending against the state, and New York filed Judge Robert J. Shelby\u2019s Aug. 4 decision against that motion within a day of its release. Shelby <a href=\"https:\/\/news.bitcoin.com\/igaming\/utah-judge-rejects-kalshis-federal-shield-from-gambling-laws\/\">granted Utah summary judgment<\/a>, calling Kalshi\u2019s central statutory argument an implausible reading of what Congress intended. The New York fight predates all of it: the state Gaming Commission issued Kalshi a cease-and-desist on Oct. 24, 2025, and the exchange sued three days later in the Southern District of New York, which turned it down on July 7 and again on July 27.<\/p>\n<p>The order cites the CFTC\u2019s July 14 Michigan intervention as its only precedent, and that one arrived too late to work. There, the commission <a href=\"https:\/\/news.bitcoin.com\/cftc-blocks-kalshi-from-cancelling-michigan-sports-trades-ordered-voided\/\">stayed Kalshi\u2019s emergency rule<\/a> and told it to fulfill open trades after Ingham County Circuit Judge Rosemarie Aquilina ordered that Michigan positions be voided, canceled, and refunded. Kalshi head of enforcement Robert DeNault <a href=\"https:\/\/x.com\/robertjdenault\/status\/2077169529684164671\" target=\"_blank\" rel=\"noopener noreferrer\">responded publicly<\/a> the same night, stating:<\/p>\n<blockquote>\n<p>\u201cWe already acted and unwound the trades, as the Michigan court order required us to do. We are being put in an impossible position, looking to follow state court orders that may contradict our federal regulatory obligations. We did not have a choice.\u201d<\/p>\n<\/blockquote>\n<p>Aquilina\u2019s order also set a geofencing deadline that falls today, Aug. 12, carrying fines of $500,000 a day from tomorrow. The Aug. 11 order settles none of New York\u2019s eight claims, and the commission conceded the case has moved to federal court, where remand fights may drag. Gambling attorney Daniel Wallach has noted that the expected Tenth Circuit appeal in the Utah case would put prediction markets before seven of the 13 federal appellate circuits, the kind of spread that typically produces a split ripe for Supreme Court review.<\/p>\n<\/p><\/div>\n<p><a href=\"https:\/\/news.bitcoin.com\/igaming\/cftc-cites-bitcoin-position-in-emergency-order-shielding-kalshi\/\">Source link <\/a><br \/>\n<br \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(Originally posted on : Bitcoin News ) Key Takeaways CFTC ordered Kalshi to keep operating after its Aug. 1 market-emergency notice. The order says forced liquidation of a bitcoin position could trigger other unwinds. A Connecticut judge rejected the swaps premise in a ruling docketed a day earlier. Bitcoin Example Broadens Fight Beyond Sports Contracts [&hellip;]<\/p>\n","protected":false},"author":3947362403,"featured_media":76727,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[32],"tags":[],"_links":{"self":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/76726"}],"collection":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/users\/3947362403"}],"replies":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/comments?post=76726"}],"version-history":[{"count":0,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/76726\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media\/76727"}],"wp:attachment":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media?parent=76726"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/categories?post=76726"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/tags?post=76726"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}