TLDR
- The CFTC ordered Kalshi not to cancel trades as demanded by a Michigan court
- A Michigan county court had told Kalshi to void and refund certain sports-related trades
- CFTC Chairman Mike Selig said states cannot “bully” federally regulated entities
- Michigan is the first state to try to directly interfere with transactions at a designated contract market
- The CFTC has also sued nine other states over prediction market jurisdiction disputes
The U.S. Commodity Futures Trading Commission ordered prediction market platform Kalshi on Tuesday not to cancel trades involving Michigan residents. This came after a Michigan county court told Kalshi to void and refund certain customer trades tied to sports-related event contracts.
JUST IN: CFTC blocks Kalshi from canceling Michigan trades despite a state court order
Chairman Michael Selig says the agency "will not allow states or state courts to bully registered entities into violating federal law," per Reuters.
The clash is the latest in a battle… pic.twitter.com/TQpC19QAQo
— Coin Bureau (@coinbureau) July 14, 2026
Kalshi is registered with the CFTC as a designated contract market (DCM). That means federal law, specifically the Commodity Exchange Act, governs how it operates.
The Michigan court order came in June, following a request from Michigan Attorney General Dana Nessel. Her office argued that Kalshi was running an unlicensed gambling operation in the state.
Kalshi filed an emergency request with the CFTC on July 2, asking how to respond to the state court’s demand to have trades “voided, cancelled and refunded.”
The CFTC responded by telling Kalshi to stand down and not comply with the Michigan order.
CFTC Chairman Mike Selig said canceling already-executed trades was “an unprecedented step” that could damage trust in the entire marketplace.
“The commission will not allow states or state courts to bully registered entities into violating the Commodity Exchange Act and CFTC regulations,” Selig said in a statement.
A Wider Battle Over Who Has Authority
This is not just about Michigan. The CFTC has filed lawsuits against Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island, and Wisconsin.
In all of these cases, the dispute is the same. States say prediction markets amount to illegal online gambling. The CFTC says Congress gave it sole authority to regulate these platforms.
Michigan is the first state to go a step further and try to directly undo trades that had already taken place.
Selig warned that allowing states to reverse completed trades would cause a “cascading effect on the entire marketplace.” He added that market certainty is a core part of how functioning financial markets work.
The CFTC also noted that federal law does not allow a DCM to discriminate against residents of any state, meaning Kalshi cannot simply cut off Michigan users to satisfy local regulators.
The outcome of this clash could shape how prediction markets operate across the country. For now, the CFTC’s order means Kalshi must continue honoring those Michigan trades.
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