CFTC Orders Kalshi Not to Cancel Michigan Trades per Court Directive

The U.S. Commodity Futures Trading Commission on July 14 ordered Kalshi not to cancel or reverse trades executed by Michigan customers in response to a state court directive. The order followed a June ruling by a Michigan county circuit court that required Kalshi to cease online sports wagers in the state.

The Michigan attorney general had requested the halt, describing the activity as illegal gambling. On July 2, Kalshi submitted an emergency request to the CFTC seeking direction on a further court order to void, cancel and refund certain Michigan users' trades.

CFTC Chairman Mike Selig said the commission would not allow states or state courts to bully registered entities into violating the Commodity Exchange Act and CFTC regulations.

"Canceling trades that have already been executed is an unprecedented step that risks a cascading effect on the entire marketplace and undermines the certainty in contracting that is a necessary component of a functioning market," Selig stated. Selig added that allowing the reversals would risk shattering public confidence by giving traders cause to worry that the trades they execute today may be unwound a week — or a year — later.

The CFTC regulates Kalshi as a designated contract market.

Michigan is the first state to attempt to interfere directly in transaction activity on the platform, the agency said. The CFTC has sued multiple states that have sought to halt or penalize event contract businesses as illegal gambling.