Kalshi is warned of possible CFTC charges over its contract filings, as a federal judge in New York rules Novig's sports contracts are not swaps

The Commodity Futures Trading Commission has warned Kalshi that it could bring charges over how the prediction market told the agency about new products, Politico reported on Tuesday, citing one person with direct knowledge of the investigation. According to that account, the probe has run for months and covers notices for dozens of products. A settlement is still possible, crypto.news reported, citing the same report. No charges have been filed, and the CFTC did not immediately comment.

Exchanges like Kalshi can list certain contracts by certifying to the CFTC that they follow the rules, instead of waiting for approval. In a July 24 advisory, the agency's Division of Market Oversight said "broad, template-style certifications should not be submitted." Kalshi spokesperson Elisabeth Diana described the matter as a procedural error involving a handful of contracts, many of which were not live, and said the company was already addressing it.

The warning comes as the CFTC tries to establish exclusive authority over prediction markets, including by challenging state efforts to regulate Kalshi, Cointelegraph reported. In New York, U.S. District Judge Colleen McMahon denied a preliminary injunction to Novig, which had sued the state's attorney general and gaming officials, ruling that its sports event contracts are not swaps under the Commodity Exchange Act, The Block reported. New York can now require Novig to get a state gambling license or stop offering the contracts there. Lawyer Daniel Wallach counted 10 rulings in sports prediction-market cases from federal courts in the Second Circuit, which includes New York, all in the states' favor, The Block said.