A $36 billion lawsuit just turned Kalshi’s $40 billion valuation race into a federal market emergency

The Commodity Futures Trading Commission (CFTC) has ordered Kalshi to keep operating after the prediction-market exchange declared a market emergency tied to New York’s enforcement campaign.

The move marks the strongest federal intervention yet in the widening fight over whether states can apply gambling laws to event contracts offered on CFTC-regulated exchanges.

It also comes as New York authorities broaden their scrutiny of prediction markets beyond Kalshi’s legal status, even as the company continues posting rapid growth and seeks a valuation of about $40 billion.

CFTC says New York action threatens national derivatives market

On Aug. 11, the CFTC directed KalshiEX LLC to continue operating under the Commodity Exchange Act’s Core Principles after the exchange told the regulator that New York’s enforcement effort had created a market emergency.

The agency said New York is seeking temporary relief that could prevent Kalshi from offering event contracts nationwide and expose the exchange to more than $36 billion in damages.

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