CFTC appeals ruling that blocked its attempt to halt Kalshi’s election contracts

The U.S Commodity Futures Trading Commission swiftly filed an appeal after a judge ruled that the agency exceeded its authority when it blocked predictions market Kalshi's election contracts.

Lawyers representing the CFTC had alluded that they would be filing that appeal during a virtual hearing held on Thursday morning.

"We're asking for an administrative stay to maintain the status quo so that in order, to allow this court or the Court of Appeals, adequate time to consider the CFTC's forthcoming motion for stay pending appeal," a CFTC lawyer told Judge Jia M. Cobb for the U.S. District Court for the District of Columbia during that hearing. 

Earlier in the day, Judge Cobb ruled that the CFTC exceeded its authority when it pushed against Kalshi's move to list contracts tied to U.S. elections. The CFTC said last year that Kalshi could not offer contracts related to "congressional control contracts." Kalshi then sued the agency in November 2023.

Judge Cobb ruled again in favor of the predictions market last week and tossed the CFTC's order blocking Kalshi from listing its congressional contracts for trading. Soon after, the CFTC filed a motion seeking an emergency stay of the judge's decision for at least two weeks while the agency works on an appeal.

During Thursday's hearing, the CFTC's lawyer warned about risks to "election integrity."

"The Commission noted serious concerns about potentially adverse effects on election integrity, or the perception of election integrity, at a time where confidence in election integrity is incredibly low," the lawyer said. "These contracts would give market participants a $100 million incentive to influence either the market or the election, which could very certainly undermine confidence in election integrity." 

"This is a very serious public interest risk," the lawyer added. 

The CFTC previously argued that Kalshi's election contracts involving gaming that was unlawful and "contrary to the public interest." In the ruling issued on Thursday, Judge Cobb decided that Kalshi's contracts do not involve "unlawful activity or gaming."

"The Court concludes that Kalshi’s congressional control contracts do not involve unlawful activity or gaming," Cobb said in the opinion. "And thus the Court has no occasion to consider whether they are contrary to the public interest."