The U.S. Commodity Futures Trading Commission (CFTC) has decided to close the case against the Kalshi platform, which specializes in betting on political events. Previously, the CFTC had prohibited the platform from accepting bets on political events, which could have led to significant financial losses related to the upcoming elections in the fall of 2024. However, as a result of a new agreement, the CFTC has dropped its further appeal.
This is reported by Business • Media
Kalshi’s Victory and CEO’s Reaction
In its statement to the Appeals Court, the CFTC noted that the decision to close the case is voluntary and agreed upon with Kalshi. As part of the agreement, the platform waives any legal claims related to this case.
“Today is a historic day. We have always believed that doing the right thing, no matter how difficult and painful it may be, pays off. This outcome is proof of that. Kalshi’s approach has officially and definitively secured the future of prediction markets in America,” said Kalshi CEO Tarek Mansour in a comment to CNBC.
Thus, the platform has effectively received a “green light” to offer its clients bets on political events. Unlike Polymarket, Kalshi is registered in the U.S. and can serve local clients.
Criticism of the CFTC Decision
However, not everyone was satisfied with the CFTC’s decision. The advocacy group Better Markets, which supported the Commission’s position, expressed outrage, accusing it of betraying the public interest:
“This decision was bad law and even worse policy, as it threatens the integrity of our federal elections, promises a new wave of market manipulation and investor losses, and places the CFTC in the role of overseeing elections, for which this small agency lacks both resources and expertise,” stated Better Markets.
It is worth noting that the CFTC’s decision to withdraw its appeal solidifies the lower court’s ruling as a precedent. Previously, the Commission had prohibited the Kalshi platform from accepting bets on the Congressional elections in September 2023. In response to this ban, Kalshi sued and won the case, but the CFTC requested delays to prepare for an appeal.