US CFTC investigates Kalshi over contract filings — CNBC

The US Commodity Futures Trading Commission (CFTC) is investigating whether prediction market platform Kalshi properly notified the regulator about proposed event contracts. As CNBC reports, the company confirmed the review and said it concerns a minor issue with the procedure for filing contracts.

Weather-related contracts

Kalshi said that the CFTC had focused on weather-related contracts. The company’s head of communications, Elizabeth Diana, said the regulator’s notice concerns a procedural error in the filing of several contracts, many of which were not active. According to her, the platform is already resolving the issue.

Prediction market platforms can self-certify event contracts without prior CFTC approval if they comply with the US Commodity Exchange Act. This mechanism makes it possible to launch new contracts more quickly.

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Other CFTC reviews

Politico was the first to report the review on Tuesday, citing a non-public CFTC notice to Kalshi, and said charges could be brought soon. Kalshi did not comment on the possibility of charges, while the CFTC did not respond to CNBC’s request for comment.

In August, the CFTC ordered Kalshi to remove sports “mention markets,” where participants trade contracts on what certain people will say on air or during a speech. The regulator was then examining this type of contract. The CFTC is also conducting a broad review of Kalshi’s competitor, Polymarket, including whether the company violated the terms of its 2022 settlement with the regulator, which prohibits US traders from accessing its international platform.