Washington escalates fight over Kalshi bets and US derivatives access

According to CryptoSlate, the Commodity Futures Trading Commission issued a demand giving US derivatives exchanges 30 days to end domestic geographic restrictions violating impartial-access rules or explain why compliance is infeasible. This federal pressure challenges the Sixth Circuit's September reasoning, which previously held that exchanges could use geographic limits while meeting federal obligations. The court's ruling had concluded that Kalshi had not shown its sports-event contracts met the statutory definition of a swap, and alternatively held that the Commodity Exchange Act did not preempt state gambling laws. The CFTC argues that excluding eligible US participants fragments liquidity and weakens price discovery, asserting that domestic location generally should not bar eligible traders. However, the agency's new interpretation does not reverse the Sixth Circuit's separate swap-classification and preemption holdings. Meanwhile, state-level restrictions and court orders continue to affect prediction market access, including a federal order concerning Indian lands in California and pending matters involving New Jersey and Michigan.