Kalshi warned of possible charges as feds turn up heat on prediction markets: report

Kalshi could face federal charges over alleged failures to notify the Commodity Futures Trading Commission (CFTC) properly about new betting contracts, according to a report. The inquiry centres on the exchange’s use of self-certification, which lets regulated platforms begin offering products soon after declaring them compliant. The scrutiny comes as prediction markets expand and concerns grow about whether some contracts can be manipulated.

Kalshi said the issue involved a procedural error in submitting a handful of contracts, many of which were not live, and that it is addressing the matter. The CFTC has cautioned operators about broad claims made when certifying products, while CME Group’s chief has also raised manipulation concerns. Kalshi and rival Polymarket are valued at $40 billion and $21 billion respectively; Polymarket faces a separate CFTC investigation into its safeguards for US users, following a 2022 settlement and $1.4 million fine.