CFTC May File Claims Against Kalshi Over New Contract Notifications

The U.S. Commodity Futures Trading Commission (CFTC) has warned prediction market operator Kalshi about potential charges related to the procedure of notifying the regulator about new contracts. This was reported by Politico, citing a source directly familiar with the investigation. According to the source, the agency is reviewing notifications for dozens of products, and the investigation has been ongoing for several months.

Kalshi, which provides the opportunity to trade contracts on the outcome of future events, received a non-public warning from the regulator. Company representative Elizabeth Diana stated that it concerns a procedural error in filing documents for several contracts, many of which were never launched. "We are already working on resolving this issue," she added.

However, assessments of the scope of the review vary. The Politico source reports dozens of products, while Kalshi claims the issue affects only a few contracts. The publication does not specify which notifications raised questions with the regulator. The possibility of charges does not yet mean that a corresponding decision has been made.

The investigation is taking place amid a separate dispute over the delineation of regulatory authority over prediction markets in the U.S. The CFTC asserts its exclusive jurisdiction in this area, challenging attempts by individual states to independently regulate Kalshi's activities.

Meanwhile, in another legal proceeding, the company supports the federal regulator's position. On Monday, Kalshi, along with the American cryptocurrency exchange Coinbase and 4 other companies, sought permission to submit written arguments in support of the CFTC's approach to perpetual futures on shares of individual American companies.

This is a separate legal case, unrelated to the review of notifications about new contracts. The published materials do not provide a final decision on potential CFTC claims against Kalshi.