CFTC blocks Kalshi from canceling Michigan trades amid state‑federal clash

The U.S. Commodity Futures Trading Commission (CFTC) ordered prediction‑market platform Kalshi to honor contracts involving Michigan residents, despite a state court order that had required the company to cancel those trades. The regulator stayed an emergency rule Kalshi had filed to unwind the contracts, citing the Commodity Exchange Act and warning that allowing states to force a registered contract market to violate federal obligations would undermine market certainty and price discovery. CFTC Chair Michael Selig said the commission will not allow “states or state courts to bully registered entities into violating the Commodity Exchange Act and CFTC regulations.”

The dispute reflects a broader jurisdictional battle between federal regulators that support the fast‑growing derivatives sector and a coalition of states and tribal authorities seeking to block what they view as illegal sports betting. Michigan was the first state to seek cancellation of executed trades, and the CFTC has filed briefs in several other states defending its exclusive authority. The outcome could set precedent for how prediction markets are regulated across the United States.