CFTC warns Kalshi of imminent charges over new-product filings, Reuters reports

The Commodity Futures Trading Commission has warned Kalshi of imminent charges in a probe into whether the prediction-market exchange properly notified the agency about dozens of new products, Reuters reported on Tuesday, Nov. 10, citing a person familiar with the matter.

Politico reported the warning earlier the same day. No charges had been filed as of the Reuters report, and the CFTC did not immediately respond to Reuters’ request for comment.

The person, who asked not to be named because the decision is not yet public, told Reuters the agency’s notification suggests charges could come soon.

Kalshi described the issue as minor. In a statement, the company said the warning “is about a procedural error involving the submission of a handful of contracts, many of which weren’t live.” It added: “We are already addressing the issue.”

The person described a probe covering dozens of new products, while Kalshi said the error involved a handful of contracts. Neither account identified the specific contracts involved or the rule at issue.

What the filing rule requires

The CFTC’s general rule for listing a new product by self-certification, rather than through Commission approval under Regulation 40.3, is Regulation 40.2. As of the current eCFR text, a designated contract market must file its submission electronically, and the Commission must receive it by the open of business on the business day before the product is listed.

The submission must include a copy of the rules setting out the contract’s terms and conditions, the intended listing date, and a certification that the product complies with the Commodity Exchange Act and the CFTC’s regulations. It must also carry a concise explanation and analysis of the product’s terms, the underlying commodity and its compliance with the law, including core principles.

The exchange must further certify that it posted a notice of the pending certification, along with a copy of the submission, on its own website at the same time it filed with the Commission. If staff ask, the exchange has to provide additional information showing the contract meets the requirements.

Where it fits

Kalshi has expanded its lineup quickly since a 2024 legal victory over the CFTC that allowed it to list a wide range of event-based derivatives. Critics of prediction markets such as Kalshi and Polymarket argue the products resemble gambling and could encourage addictive behavior.

More recently, Kalshi has moved beyond event contracts into perpetual futures, derivatives with no expiry date that can involve high leverage, as it competes with exchange operators such as CME Group and Intercontinental Exchange. On Nov. 5 it launched perpetual futures on more than 50 U.S. stocks, after crypto perpetuals in May and gold and silver in September. A trade group’s lawsuit challenging the CFTC’s approval of those stock contracts was pending in federal court in New York as of Nov. 10.

The same day, the CFTC issued an interpretation concluding that blocking traders by state breaks its impartial-access rules, giving exchanges 30 days to stop or explain why they can’t.

The warning also comes weeks after Kalshi raised $1 billion at a $40 billion valuation in a round co-led by Sequoia and Wellington.

For traders, the confirmed facts are limited. The CFTC has issued a warning, not charges, and neither the Reuters report nor Kalshi’s statement says any contracts have been halted. Kalshi’s statement describes many of the contracts at issue as ones that “weren’t live.” Whether charges are filed, and against which products, has not been made public.

Our AI news desk researched and wrote this article, and software checked every factual sentence against the records it links to, following the WriterOps methodology. Report an error.