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Highlights
- CFTC secured an administrative stay of the District court's order in its case against Kalshi.
- The prediction market has halted its US election trading following the stay order.
- Prediction markets have become significant in the crypto community as natives use it to weigh the likely winner between Trump and Harris.
The US Commodity Futures Trading Commission (CFTC) has secured an administrative stay on the underlying order in its case against Kalshi. This has led to the prediction market halting its US election trading less than 24 hours after it went live. This development comes as crypto natives continue to take a keen interest in the US presidential elections. Analysts say the outcome could significantly impact Bitcoin and other cryptocurrencies.
CFTC Secures Court Order In Case Against Kalshi
CFTC secured an order in its case against Kalshi as the Court of Appeals decided to administratively stay the District Court’s order. This administrative stay is pending when the appeal court can sufficiently consider the Commission’s motion for a stay pending appeal. US District Judge Jia Cobb had earlier ruled in favor of Kalshi, declaring that the regulator had acted beyond its powers when it prevented the predictions market from listing election bets.
Following the ruling, the CFTC asked Judge Cobb to prevent Kalshi from launching its election trading platform until she published her full opinion. This was intended to help the Commission decide whether to appeal. However, the District judge denied the request, which led the regulator to file an emergency motion at the Court of Appeals for a stay of the order, seeing that Kalshi had launched its election markets.
The Court of Appeal’s decision to grant an administrative stay ultimately led to Kalshi halting its trading market less than 24 hours after it went live. The appeal court noted that its ruling was not on the merits of the motion. It further ordered Kalshi to file a response to the emergency motion to help the court decide whether to stay the order until the appeal is done.
Kalshi Files Response To Motion
Kalshi’s response to the motion highlighted how the CFTC wasn’t entitled to a stay pending appeal since its appeal was unlikely to succeed on the merits. The filing emphasized Judge Cobb’s reasoning that the Commission cannot prevent the prediction platform from launching an election market since it does not involve any unlawful activity or relate to gaming.
Kalshi’s lawyers further argued that the regulator wouldn’t suffer any “irreparable harm” if a stay weren’t granted. They added that a stay disfavors public interest since the Commission is acting unlawfully to prevent event contracts on election outcomes. Kalshi also asserted that it would suffer irreparable harm if the stay were granted. Specifically, the platform claimed that it would suffer financial harm and couldn’t sue the Commission for damages because of the APA waiver on sovereign immunity.
The Significance Of These Prediction Markets
The CFTC’s case against Kalshi is notable as prediction markets have become significant in the crypto community ahead of the US elections in November. Crypto natives use the sentiments among bettors to determine the likely winner at the polls between Donald Trump and Kamala Harris. Crypto has also become a major topic in this election. Trump has publicly declared his support for Bitcoin, while Harris remains tight-lipped about where she stands.
In line with this, analysts have continued to make Bitcoin price predictions based on who emerges as the next US president. Bernstein analysts predicted that the BTC price would reach $90,000 if Trump wins. On the other hand, they claim that the leading crypto could drop to as low as $30,000 if Harris wins.
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