The Commodity Futures Trading Commission (CFTC) secured an administrative stay in its legal battle with prediction marketplace Kalshi, temporarily halting the platform’s newly launched US election trading. This action came as the court reviewed the CFTC’s motion after Kalshi’s election contracts had been live for just 24 hours.
The halt comes at a crucial time, as interest in election predictions has surged within the cryptocurrency community, which is closely watching the upcoming election. The delay could cause Kalshi to miss out on substantial revenue from its US election prediction market.
Previously, Kalshi won a legal victory when US District Judge Jia Cobb ruled that the CFTC acted beyond its jurisdiction by preventing the marketplace from listing election contracts. This ruling gave Kalshi the green light to offer derivative contracts related to the November US elections.
However, the CFTC contested the decision, claiming it needed more time to assess the judge’s reasoning and decide whether to appeal. The agency initially requested a 14-day stay of the ruling, which was denied, prompting the CFTC to escalate the issue to the US Court of Appeals.
CFTC Secures Temporary Halt on Kalshi’s Election Contracts Amid Legal Dispute Over US Election Trading
In response to the CFTC’s emergency motion, the US Court of Appeals granted an administrative stay, effectively pausing the district court’s ruling. This decision does not indicate whether the CFTC’s motion will succeed but gives the court additional time to consider whether a full stay is warranted during the appeals process.
As a result, Kalshi was forced to shut down its election trading just half a day after its launch, dealing a significant blow to its business. Kalshi has opposed the CFTC’s motion, arguing that any further delays in listing election contracts would result in severe financial losses.
The legal dispute between Kalshi and the CFTC has gained widespread attention, particularly within the cryptocurrency sector. Prediction markets are seen as a valuable tool for assessing political outcomes, which can, in turn, influence market sentiment.
With the upcoming US presidential election, both crypto investors and political bettors are closely following the race, especially as the stances of key candidates differ widely on cryptocurrency issues. While Kamala Harris has remained largely silent on her position regarding crypto, Donald Trump has been outspoken in his support for Bitcoin and the broader crypto market.
The outcome of the election could significantly impact the future of Bitcoin and other cryptocurrencies. Analysts predict that if Trump wins, Bitcoin’s price could rise dramatically to around $90,000 due to his pro-crypto stance.
Conversely, a Harris victory could see Bitcoin’s value fall, possibly down to $30,000. As the election approaches, platforms like Kalshi stand to play an important role in providing insights into voter sentiment, making the court’s final decision on the CFTC case even more critical for both the predictions market and the crypto space.
