Summary

  • The US Commodity Futures Trading Commission (CFTC) said it is reviewing possible sanctions over allegations that prediction-market platform Kalshi violated contract reporting procedures.
  • Kalshi said only a small number of the prediction-market contracts were involved, that many never began trading, and that it is taking steps to resolve the issue.
  • The CFTC is also investigating Polymarket, and the outcome could lead to tighter reviews of how prediction-market platforms list new contracts and maintain regulatory compliance systems.

Forecast Trend Report by Period

The US Commodity Futures Trading Commission is considering sanctions over allegations that prediction-market platform Kalshi failed to follow contract reporting procedures.

Politico reported on November 10 that the CFTC told Kalshi sanctions could be imposed over allegations that it failed to properly report dozens of new prediction-market contracts to the agency. The investigation has been underway for months. The central question is whether Kalshi complied with reporting requirements when it listed the new contracts.

The CFTC allows exchanges to list new contracts without prior approval under a self-certification system. Even so, exchanges must certify that the contracts comply with relevant rules and report them to the agency under prescribed procedures.

Kalshi said the matter involves administrative filing errors affecting only a small number of contracts. It added that many of the contracts in question never began trading. The company said it is taking steps to address the issue.

The CFTC is also conducting a separate investigation into rival prediction-market platform Polymarket. That probe is examining whether Polymarket violated its obligation under a 2022 settlement with the CFTC to restrict access for US users.

The investigation comes as calls for tighter oversight of prediction markets grow in Washington. Democrats in particular are moving to expand congressional scrutiny, putting compliance by prediction-market operators at the center of the debate.

Still, no decision has been made on whether to sanction Kalshi or on the specific form any penalty might take. Depending on the outcome of the CFTC's investigation, scrutiny of how prediction-market platforms list new contracts and maintain compliance systems could intensify.

Suehyeon Lee