The CFTC ordered KalshiEX to honor trades that a Michigan state court had directed it to cancel, escalating a legal battle over regulatory jurisdiction between states and the federal government. The federal agency used its emergency powers to block a rule change that Kalshi had proposed in response to the Michigan court order. CFTC Chairman Michael S. Selig stated that state courts cannot force a designated contract market to violate the Commodity Exchange Act. The CFTC described Michigan as the first state to attempt to directly interfere with executed derivatives transactions. The outcome will determine the boundary between federal derivatives regulation and state gambling law for the prediction-market sector.
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