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CFTC declares market emergency, orders Kalshi to continue to operate in New York
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Re: CFTC declares market emergency, orders Kalshi to continue to operate in New York
#62Am I reading this right? The state of New York wants Kalshi to stop offering prediction gambling, excuse me, "event contracts" in New York, and the federal Commodity Futures Trading Commission just ordered Kalshi to keep operating in New York regardless?
Donald Trump Jr is a “strategic advisor” at Kalshi and was given equity in the company. Hope that helps.
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Re: CFTC declares market emergency, orders Kalshi to continue to operate in New York
#63Earlier quoted context omitted.
Do you have a source for that? From the release: > In the lawsuit, filed on July 31, New York seeks a temporary restraining order prohibiting KalshiEX, LLC from offering all event contracts nationwide and more than $36 billion in damages.
Lawyer here: https://ag.ny.gov/sites/default/files/court-filings/new-york... This is the complaint. If you go to page 29 you'll see what they requested. The claim they are trying to prevent them from offering all event contracts nationwide is simply false. The closest anywhere is a claim to enjoin them from violating some federal criminal statutes that they would not be violating if they were not operating in new yor…
Edited my earlier comment to point here. Is your assessment that CFTC is pulling the broader impact fully out of the air, or are likely to try to spin the coverage of events in New York for participants outside of New York as counting as interstate commerce?
Re: CFTC declares market emergency, orders Kalshi to continue to operate in New York
#64Earlier quoted context omitted.
I think the question is whether or not this is damaging to the case that the Kalshi and others could be regulated state by state..
I (unfortunately) think that the NY AG screwed up our opportunity to press that question by aiming nationally. The CFTC got to skip that and just shut down the national TRO. I'd love to see another state push for a state-specific restriction and see how that plays out.
There were 3 alarmingly assertive, not even wrong in the Pauli sense, comments I saw in this thread, this being the last, and it turns out they’re all by you.
HN in general gets ahead of its skis a ton on legal stuff, it’s not personal. I deserve what I’ll get for speaking plainly to you, I hope the fact I’m speaking plainly and incurring cost will encourage you to move slightly more slowly.
In order:
Regulating interstate commerce is a fed thing, yes, that doesn’t mean states are unable to do anything at all to companies operating in multiple states. It was jarring to hear that described as one of the most settled principles we have.
NYS was not asking for a national TRO. It was jarring to read that asserted.
The first paragraph of the CFTC release we are commenting on says it ordered Kalshi to be able operate nationally. It was jarring to read it was made up that the CFTC ordered it to be able to operate.
Re: CFTC declares market emergency, orders Kalshi to continue to operate in New York
#65EDIT: see DannyBee's comment below ( https://news.ycombinator.com/item?id=49266746 ). It does look like the CFTC has extrapolated the "nationwide" out of either some novel interpretation of the filing or just entirely fabricated it as their justification for their action. I've got no love for Kalshi, but "orders Kalshi to continue operate in New York" doesn't seem to be present anywhere in the actual release. The art…
I think it's good to have the official context from the state of NY as well, which argues that Kalshi meets the state's standards for gambling; has serially refused to get the required licenses, and serves customers aged 18-20 in a market where gambling is restricted by law to people over 21.
https://ag.ny.gov/press-release/2026/governor-hochul-and-att...
My impression was that NY wanted a TRO to stop Kalshi operating in New York, not nationally. A TRO seems like a rather extreme measure in that it assumes the plaintiffs win the lawsuit as a premise, but I guess that's partly a function of how long New York has been trying and failing to obtain compliance with its gaming laws, and intended to provoke a preliminary hearing into the merits of the case (vs letting the litigation drag on for years without anyhting changing).
Re: CFTC declares market emergency, orders Kalshi to continue to operate in New York
#66I hope the Kalshi executives remember that New York state police do not report to the CFTC and are not bound by its orders!
Re: CFTC declares market emergency, orders Kalshi to continue to operate in New York
#67Earlier quoted context omitted.
What? It’s in the first paragraph. > August 11, 2026 > > WASHINGTON — The Commodity Futures Trading Commission today exercised its emergency authority in response to KalshiEX, LLC’s notification of a market emergency and ordered the exchange to continue to operate in accordance with the Commodity Exchange Act’s Core Principles. Further, the operative document that this press release is about is titled “ORDER DIRECTIN…
The "order" there is effectively a reset button to the TRO. Its function is to say "you can ignore the TRO and continue business as usual". It doesn't force Kalshi to continue operating if they had their own reasons for pausing operations.
The order actually does legally require Kalshi to continue operating, and unless they successfully appeal, Kalshi would be breaking federal law.
Market regulators do have this power.
Re: CFTC declares market emergency, orders Kalshi to continue to operate in New York
#68Just listen to the overwhelming silence from the “states’ rights” crowd.
This has little to do with NY governing NY. NY was attempting to govern Kalshi in other states, which it doesn't have the authority to do.
Re: CFTC declares market emergency, orders Kalshi to continue to operate in New York
#69Earlier quoted context omitted.
That is not true? The order was to stop them from operating in the state.
Do you have a source for that? From the release: > In the lawsuit, filed on July 31, New York seeks a temporary restraining order prohibiting KalshiEX, LLC from offering all event contracts nationwide and more than $36 billion in damages.
I think what the CFTC are arguing is that offering contracts in 49 states (everywhere except New York) is not "Nationwide".
So yes, technically the restraining order is preventing Kalshi from offering Nationwide contracts.
Re: CFTC declares market emergency, orders Kalshi to continue to operate in New York
#70Earlier quoted context omitted.
Traditional derivatives can be used to trade the risk that would already exist with or without the existence of the derivatives market. Prediction markets create risk out of thin air.
Do you think insurance markets create risk out of thin air too?
Of course not. If a building exists, there is a risk it burns down. Insurance just moves that risk around. The only way to eliminate the risk is to not build anything anywhere.