The US Commodity Futures Trading Commission (CFTC) has dropped its appeal in his case against Kalshi, a New York-based prediction market, according to a Monday dish, finally clearing the way for the platform to offer political event contracts.
Under the terms of the proposal for voluntary dismissal, which is still subject to legal approval, both parties pay their own legal costs, and Kalshi deducts any right to sue CFTC for the trial.
“Today is historic. We have always thought that doing things in the right way, no matter how hard, no matter how painful, pays off. This result is proof of it,” Kalshi CEO Tarek Mansour said in a statement. “Kalshi’s approach has officially and definitively secured the future of prediction markets in America.”
Kalshi’s match with CFTC began in 2023 when the regulator refused Kalshi’s plan to let users bet on which party would control the chambers of the congress. At the time of denial, CFTC – then under the leadership of former President Rostin Behnam – claimed that such contracts involved illegal games and were “contrary to the public interest.”
In November, the Kalshi CFTC in Washington, DC, sued, claiming that CFTC had exceeded his authority in trying to block the contracts and ask a judge to leave the decision. The court sits with Kalshi in September 2024 and clears the way for the platform to list the political contracts.
Immediately after losing the case, CFTC shrinked to undo the district judge’s decision. It applied for a 14-day stay of the order-at-the-most important one-week delay on Kalshi’s ability to list the contracts while CFTC prepared for an appeal and was denied. Then it filed an appeal and repeated many of the same arguments it had used in its original defense.
Shortly after oral arguments in early January, however, US President Donald Trump returned to office. His eldest son, Don Jr., joined Kalshi as a strategic advisor on January 13. Rob Schwartz, CFTC’s Attorney General at the time the appeal was filed, left the Agency in April after withdrawing from the case in March.
Under the leadership of acting chairman Caroline Pham, the agency has changed its approach to crypto, cut several pieces of crypto-related guidance and narrowing his once large series of enforcement forces down to only two in an attempt to simplify its regulation and enforcement of the crypto industry.
