The U.S. Commodity Futures Trading Commission (CFTC) has told prediction market operator Kalshi not to cancel trades already made by Michigan users. The CFTC says reversing completed contracts could hurt confidence in regulated derivatives markets. This decision also shows the regulator believes federal law is more important than state actions for CFTC-regulated exchanges.
The dispute started when a Michigan court told Kalshi to stop offering certain event contracts in the state and later ordered the company to void and refund affected customer trades.
.@CFTC Stays KalshiEX Rule Change and Exercises Emergency Authority to Order Fulfillment of Pending Trades: https://t.co/iQEA72sMGt
— CFTC (@CFTC) July 14, 2026
To follow the court’s order, Kalshi suggested an emergency rule to cancel the contracts, refund customers, and cover any losses with its own funds. But the CFTC used its emergency authority to pause this plan while it reviews the legal and regulatory issues.
CFTC Chairman Michael Selig said states cannot force federally regulated contract markets to break their obligations under the Commodity Exchange Act. He warned that letting completed trades be reversed would create uncertainty in financial markets, as people might worry that legally executed contracts could later be cancelled by court action.
Instead, the regulator told Kalshi to settle the affected contracts using its normal procedures while the agency does a detailed review. This process could take up to 90 days and may include public consultation.
The Michigan case is part of a broader legal battle between the CFTC and several U.S. states over the regulation of prediction markets. The federal regulator maintains that exchanges such as Kalshi fall under its exclusive jurisdiction rather than state gambling laws.
Source: cftc.gov
This development comes as Kalshi keeps growing its business. The company is reportedly seeking regulatory approval to launch perpetual futures contracts for more asset classes, such as metals, energy, and foreign exchange, after already launching perpetual crypto futures.
The CFTC’s latest decision shows stronger support for federally regulated prediction markets and signals that it plans to defend its authority against more challenges from state regulators.
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