A Shift in Tides: CFTC Abandons Legal Battle with Prediction Markets Platform, Kalshi
Kalshi's Court Battle with the CFTC Approaching Conclusion as Agency Abandons their Appeal
In a surprising turn of events, the U.S. Commodity Futures Trading Commission (CFTC) has decided to drop its longstanding legal battle with prediction markets platform, Kalshi. The CFTC initially took issue with Kalshi's intention to accept bets on U.S. election outcomes.
On Monday, the CFTC filed a motion to voluntarily withdraw its appeal with the U.S. Court of Appeals for the District of Columbia. According to a representative speaking to Reuters, the decision to abandon the appeal followed a vote on the matter.
The CFTC's move comes as a breath of fresh air for the tech industry, given the reduction in federal regulatory oversight under President Trump. In February, President Trump appointed pro-crypto regulator Brian Quintenz as commissioner, who is known for his favorable views on digital assets. This shift in leadership has led to a pro-tech vibe at the CFTC.
Kalshi, for its part, has embraced this change, launching numerous election-based markets and even integrating crypto payments into its platform late last year. The end of the legal battle is undoubtedly a victory for Kalshi, signaling the permanence of election markets.
Meanwhile, concerns persist over the deepening ties between the Trump family and Silicon Valley. Trump's sons have ventured into the cryptocurrency and tech industries, while Trump Media & Technology Group recently entered a partnership with Crypto.com.
The legal saga between Kalshi and the CFTC began in 2023 when Kalshi sought permission from the CFTC to launch event contracts based on U.S. congressional races. However, the CFTC denied the request, citing concerns about potential manipulation of the democratic process. The subsequent lawsuit culminated in a federal court ruling in September 2024 in favor of Kalshi, prompting the CFTC to appeal the decision.
In May 2025, the CFTC dropped its appeal, allowing Kalshi to proceed with its U.S. election-based contracts. The dismissal was accompanied by Kalshi's agreement to pay its own legal fees and waive any future claims against the CFTC. This move is seen as a significant shift in the CFTC's regulatory stance under its current leadership.
In another development, Kalshi secured a preliminary injunction from the New Jersey Division of Gaming Enforcement in May 2025, preventing the enforcement of certain regulations against the platform.
This victory for Kalshi is being hailed as a landmark development in the prediction markets sector, potentially paving the way for further expansion.
- The CFTC's decision to withdraw its appeal against Kalshi marks a significant victory for the tech industry, particularly in the field of cryptocurrency.
- With the integration of crypto payments, Kalshi has positioned itself to leverage the growing interest in digital assets within the business world.
- The support for digital assets from commissioner Brian Quintenz at the CFTC has contributed to a pro-tech atmosphere, potentially leading to more crypto-related opportunities in the future.
- The legal battle between Kalshi and the CFTC did not deter Kalshi from exploring new territories, such as launching election-based markets.
- Given the dismissal of the CFTC's appeal and Kalshi's agreement to pay its own legal fees, the CFTC seems to be embracing a more lenient regulatory stance towards prediction markets and cryptocurrency.
- The partnership between Trump Media & Technology Group and Crypto.com further underscores the increasing intertwining of tech and finance industries, particularly with the rise of cryptocurrencies.
- The preliminary injunction obtained by Kalshi from the New Jersey Division of Gaming Enforcement could set a precedent for future developments in the decentralized world of prediction markets, stablecoins, and other cryptocurrencies.
