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Matthias Knab, Opalesque for New Managers:

The U.S. Commodity Futures Trading Commission has invoked its statutory emergency powers to order prediction market exchange KalshiEX LLC to keep operating, after the New York Attorney General asked a state court to shut it down and sought more than $36 billion in damages.

The order, issued on August 11, directs Kalshi to continue performing its functions as an exchange in accordance with the Commodity Exchange Act's Core Principles and its normal practices. It is the second time in under a month that the Commission has reached for Section 8a(9) of the CEA on Kalshi's behalf.

Kalshi has been a designated contract market, or DCM, since November 2020. A DCM is a federally registered exchange licensed by the CFTC to list derivatives for trading by the general public - the same regulatory status held by CME, CBOT and ICE Futures U.S. It is what puts Kalshi inside the perimeter the Commission is defending here, and it is why the dispute is not really about sports betting.

What makes this one worth the attention of anyone running money in U.S. derivatives markets is not the prediction-market politics. It is the definition of "emergency" being used.

An emergency, by whose account

Section 8a(9) lets the Commission direct a registered entity to ta......................

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