The US Commodity Futures Trading Commission has sued Utah and the state’s attorney general, escalating a dispute over whether state authorities can restrict prediction markets operated by federally regulated exchanges.
Federal regulator challenges Utah’s case
The CFTC filed its complaint on Monday in the US District Court for the District of Utah, one week after Utah officials announced legal action against Kalshi and affiliated companies. Utah’s attorney general, Derek Brown, said the state intended to seek the return of as much as $60 million in profits that it alleges Kalshi and its affiliates obtained illegally through event contracts.
The products at the center of the dispute allow users to trade contracts tied to the outcome of events. The CFTC argues that these contracts are swaps under the federal Commodity Exchange Act and that the exchanges offering them are CFTC-regulated Designated Contract Markets, or DCMs.
In its filing, the federal regulator said Utah was attempting to work around Congress’s decision to preempt state law in this area. The CFTC argued that state efforts to limit the operation of a federally registered exchange interfere with the federal framework established to oversee US commodity derivatives markets.
The agency’s position reflects a broader claim by CFTC Chair Michael Selig that the commission has exclusive jurisdiction over prediction markets. That position has helped produce a series of legal confrontations between federal authorities and individual states.
Kalshi says federal law governs its business
Kalshi spokesperson Jacki McGavick said, according to Cointelegraph, that the platform is a national derivatives market overseen by the CFTC and that individual states should not be able to veto its operations.
Utah’s action concerns allegations that Kalshi’s event-based contracts amount to illegal betting under state law. The CFTC’s lawsuit, by contrast, focuses on whether federal regulation prevents Utah from applying its own restrictions to products approved and offered through a CFTC-regulated market.
The clash illustrates the regulatory uncertainty surrounding prediction markets in the United States. These platforms use contracts linked to future events, while regulators and courts continue to consider whether particular products fall primarily under federal derivatives rules or state gambling laws.
Dispute could reach the Supreme Court
The Utah case is part of a wider wave of litigation involving Kalshi and state officials. Similar disputes are pending in Michigan, Ohio, Kentucky, Nevada, Massachusetts, Wisconsin and New York.
In September, officials in New Jersey asked the US Supreme Court to review their case against Kalshi. As of Tuesday, the Supreme Court had not announced whether it would hear arguments. A ruling by the high court could provide a nationwide answer to the conflict between state restrictions and federal oversight, although the source material does not indicate whether the court will accept the case.
Moneyiar market picture
Moneyiar data as of October 25, 2026, shows mixed performance among the listed digital assets:
- Filecoin (FIL): $0.9256286118, down 0.7% over 24 hours and 10.35% over seven days.
- Sui (SUI): $0.9236567057, down 0.79% over 24 hours and 5.59% over seven days.
- OriginTrail (TRAC): $0.3709267304, down 3.98% over 24 hours and 5.1% over seven days.
- RedStone (RED): $0.1452603192, down 2.72% over 24 hours but up 6.36% over seven days.
These figures are Moneyiar data recorded at the stated time and are separate from the legal dispute over Kalshi.
