Judge Denies CFTC’s Emergency Bid to Halt New York’s Case Against Kalshi

TL;DR:

• The CFTC requested an emergency temporary restraining order to block New York’s lawsuit against Kalshi, but the request was denied.
• Judge Jed S. Rakoff determined that the agency failed to demonstrate a likelihood of success on the merits or the risk of imminent irreparable harm.
• The CFTC may renew its request before Judge Victor Marrero on August 7: New York’s lawsuit remains active.

Judge Jed S. Rakoff, of the U.S. District Court for the Southern District of New York, denied without prejudice the emergency request filed by the CFTC to temporarily block the enforcement action brought by the state of New York against prediction markets firm Kalshi. The ruling leaves the state lawsuit in place and opens the possibility for the agency to renew its request before Judge Victor Marrero on the upcoming August 7.

Rakoff grounded his denial in the finding that the CFTC failed to demonstrate a high likelihood of success on the merits or the existence of imminent and irreparable harm that would justify an emergency measure. The decision does not resolve the underlying dispute, but allows the state lawsuit to proceed while the jurisdictional debate remains open.

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