Deniz 
The website celebrated with a triumphant message on its homepage following a judge yesterday rejecting an order from the U.S. Commodities and Futures Trading Commission (CFTC) forbidding U.S.-regulated prediction marketplace Kalshi from offering prediction contracts related to the 2024 election: “We did it! U.S. election markets are coming to Kalshi. Stay tuned for more info, and God bless America!”
But in a move filed Friday night at around midnight, the CFTC is requesting an emergency stay of the judge’s order for at least two weeks while the agency handles an appeal. The lawsuit comes even before the court, United States District Judge for the District of Columbia Jia Cobb, released her ruling outlining the initial dismissal order, which was given Friday earlier on.
“Without the benefit of the Court’s reasoning, the CFTC is unable to make an informed decision whether to appeal, nor is it able to fully brief a motion for stay pending any forthcoming appeal,” the emergency filing of the CFTC argues. The agency contends, “Time is of the essence” when it comes to the subject since Kalshi might perhaps list regulated election contracts as soon as Tuesday morning, should the company self-certify the contracts on Monday and wait the mandatory one business day before a public listing.
The unexpected request comes as Kalshi tries to profit from the surge in popularity of political prediction markets, particularly Polymarket, the distributed prediction market popular among crypto traders but which legally forbids anyone in the United States from engaging. Though many traders probably use VPN software to hide their actual place of origin, U.S. dealers are formally forbidden.
Based on its filings, the CFTC is concerned that should the contacts start trading, the agency will not be able to later rescind clearance. Arguing that such a ruling would cause the CFTC “irreparable damage,” the brief says, “if Plaintiff lists its contracts for trading, the CFTC has very limited recourse to cease trading or otherwise unwind the contracts.”
The CFTC further contends that delaying the clearance benefits the general public. “The relevant contracts could potentially be used in ways that would have an adverse effect on election integrity, or the perception of election integrity, and could put the Commission in the position of investigating election-related activities,” the file notes.
Offering such contracts has two key advantages; hence, Crypto VC company Paradigm issued an amicus brief supporting Kalshi’s action. “First, they let those directly affected by political results hedge to help reduce risk. Second, they offer data the public can use to improve prediction—and hence, planning for—a given result,” the amicus brief of Paradigm notes.
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