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Kalshi has returned to the Second Circuit Court of Appeals seeking an injunction pending appeal after the Commodity Futures Trading Commission issued an emergency order directing the company to keep operating while it fights New York in court.
According to SBC Americas, Kalshi told the appeals court that the CFTC’s "market emergency" declaration creates a direct conflict with New York’s effort to obtain a temporary restraining order that could stop at least some of the prediction market operator’s business.
CFTC emergency order became central to Kalshi’s new filing
The sequence laid out in the report is unusual. On July 29, the Second Circuit denied Kalshi’s original request for an injunction pending appeal. New York Attorney General Letitia James then sued Kalshi on July 31, seeking $36 billion.
The report says Kalshi notified the CFTC on Aug. 1 that New York’s case posed an existential threat. On Aug. 11, CFTC Chairman Michael Selig used the agency’s emergency powers to order Kalshi to continue operating. Kalshi then cited that directive repeatedly in a new Aug. 12 letter to the Second Circuit.
SBC Americas reported that Kalshi attorney Will Havemann referenced the CFTC order 16 times in the filing.
The CFTC order, as quoted in the report, said Kalshi warned that a TRO could "enjoin the operation of the DCM completely," require customer refunds and disgorgement of profits from completed trades, and expose traders to losses and broader market disruption.
Why the case matters for prediction markets
The article describes the CFTC’s emergency move as highly unusual, saying the power had been used only twice in the past 45 years.
It also places the dispute in a broader policy fight over prediction markets. According to the report, the CFTC has filed lawsuits in nine states seeking to block state efforts to stop parts of prediction market activity. The agency has also filed amicus briefs supporting prediction market operators in the Sixth and Ninth Circuit Courts of Appeals and in Massachusetts state court.
For players and market users, the immediate issue is operational certainty: whether courts allow Kalshi to keep offering its markets while the New York case proceeds.
What to watch next
The next key question is whether the Second Circuit grants the injunction Kalshi is seeking. The report also notes that New York could appeal the CFTC emergency declaration either to the Second Circuit or the D.C. Circuit.
Those decisions could help shape how far federal regulators can go to protect prediction market operators when states move to shut down or limit their activity.
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Source: As reported by sbcamericas.com.
