CFTC Orders Kalshi Not to Comply With Michigan Court’s Trade-Cancellation Order

The US Commodity Futures Trading Commission has ordered prediction-market platform Kalshi not to comply with a Michigan state court order requiring it to cancel trades.

CoinDesk reported on July 14 that the CFTC issued an administrative order barring Kalshi from carrying out the Michigan court’s trade-cancellation directive. The agency said it has exclusive authority to preempt state intervention because it regulates Kalshi as a designated contract market, or DCM.

CFTC Commissioner Mike Selic said in a statement that the agency would not allow state governments or courts to pressure registered entities into violating the Commodity Exchange Act and CFTC regulations. Canceling trades that have already been executed would be an unprecedented step, he added, one that could trigger broader market disruption and undermine contractual certainty.

The dispute dates back to June, when a county circuit court in Michigan, at the request of the state attorney general, ordered Kalshi to halt its online sports-betting service. On July 2, the court issued an additional order directing the company to cancel and refund trades made by Michigan users, prompting Kalshi to seek emergency relief from the CFTC.

The CFTC said permitting trade cancellations could erode market confidence by raising fears that trades executed today could be voided a week or even a year later. It ordered Kalshi to stop complying with the court directive. The agency also said it has already sued several states seeking to regulate prediction-market businesses as illegal gambling, and that Michigan is the first state to directly demand trade cancellations.