After a judge yesterday denied an injunction from the U.S. Commodity Futures Trading Commission (CFTC) to ban U.S.-regulated prediction market Calci from offering prediction contracts related to the 2024 election, the website posted a triumphant message on its homepage: “We did it! The U.S. election market is coming to Calci. Stay tuned for more information, and God bless America!”
But the CFTC, in a motion filed at midnight last night, asked the agency to urgently stay the judge’s decision for at least two weeks while the agency appeals. The motion was filed before the judge in the case, U.S. District Judge Gia Cobb of the District of Columbia, even issued an opinion explaining the original dismissal order issued Friday.
“Without the benefit of the court’s reasoning, the CFTC cannot make an informed decision on whether to appeal, nor can it provide a full brief on the motion to stay pending appeal,” the CFTC’s emergency filing states. But the agency argues that “time is of the essence” in this matter, since Kalshi could potentially list the regulated election contract as early as Tuesday morning if it self-certifies the contract on Monday and waits the required one business day before publicly listing it.
The unusual request comes as Kalshi tries to capitalize on the growing popularity of political prediction markets, particularly Polymarket, a decentralized prediction market popular with cryptocurrency traders. However, Polymarket is legally prohibited from participating by anyone in the United States. (American traders are officially banned anyway. Many traders likely bypass the restrictions by using VPN software to disguise their actual country of origin.)
The CFTC is concerned that once a contract begins trading, it will be unable to later revoke its approval, according to the filing. “Once a plaintiff lists a contract for trading, the CFTC has very limited remedies to halt trading or terminate the contract,” the filing states, arguing that such a decision would cause “irreparable harm” to the CFTC.
The CFTC also argues that delaying approval is in the public interest. “The contract could potentially be used in a manner that could negatively affect the fairness or perception of fairness of elections, and could expose the Commission to an investigation into election-related activities,” the filing states.
Crypto VC firm Paradigm filed an amicus brief in favor of Kalshi’s lawsuit, stating that there are two main benefits to offering such contracts. “First, it allows parties directly affected by political outcomes to hedge and mitigate their risk. Second, it provides the public with information they can use to better anticipate and therefore plan for given outcomes,” Paradigm’s amicus brief states.
The Block could not immediately reach Karli for comment.
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