CFTC Overrides Michigan Court, Orders Kalshi to Settle Cancelled Trades

The Commodity Futures Trading Commission on July 14 stepped directly into a standoff between prediction-market operator KalshiEX, LLC and the state of Michigan, staying an emergency rule change Kalshi had proposed and using its own emergency authority to order the exchange to fulfill open trades "in accordance with its normal practices."

According to the CFTC's press release (Release 9267-26), the sequence began with a Michigan state court order directing Kalshi to cancel certain already-executed trades involving Michigan residents. Kalshi responded by proposing an emergency rule change — the agency did not disclose its contents — apparently to comply. The CFTC stayed that rule change and, separately, ordered Kalshi to settle the pending trades rather than void them.

The agency framed the move as a jurisdictional line in the sand. Under the Commodity Exchange Act, the CFTC says it must maintain "a uniform national market in derivatives transactions" with impartial access, and that registered entities — designated contract markets, or DCMs — cannot discriminate against a state's residents. "A state cannot force a DCM to violate its obligations, and federal law does not permit a DCM to discriminate against a state's residents," Chairman Michael S. Selig said in the release. He called cancelling executed trades "an unprecedented step that risks a cascading effect on the entire marketplace."

The CFTC also disclosed the broader campaign this fits into: it says it has sued nine states — Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island, and Wisconsin — to protect its jurisdiction, and filed amicus briefs in the Sixth and Ninth Circuit Courts of Appeals and the Massachusetts Supreme Judicial Court. Michigan, the agency says, is the first state to try to interfere directly with executed trades rather than block access up front.

Key facts

• The CFTC stayed a KalshiEX emergency rule change and ordered fulfillment of open trades on July 14, 2026 — CFTC Release 9267-26.
• The rule change followed a Michigan state court order to cancel certain executed trades involving Michigan residents — CFTC.
• The CFTC says it has sued nine named states over prediction-market jurisdiction and filed amicus briefs in three appellate courts — CFTC.
• Chairman Michael S. Selig characterized cancelling executed trades as "unprecedented" — CFTC.

The real-world read

There is exactly one account of this on the record so far, and it belongs to the federal regulator asserting its own power. The CFTC's release doesn't say what Michigan's court actually found, what the underlying trades were (election contracts and sports markets have driven most Kalshi-versus-state fights, but the release names neither), or what Kalshi's rejected rule change proposed. Kalshi's and Michigan's positions weren't stated; neither the court order nor the exchange's filing was published alongside the release.

Worth noting: the agency stayed a change Kalshi itself proposed to comply with a court, then ordered Kalshi to do the opposite — leaving the exchange caught between a state court and its federal regulator, a conflict this order sharpens rather than resolves. The "cascading effect on the entire marketplace" is Selig's characterization, not a demonstrated outcome.

This is news reporting, not financial or legal advice.

Sources

• CFTC, Press Release 9267-26 (primary) — the fact of the stay and fulfillment order, Chairman Selig's quotes, and the list of states sued and amicus briefs filed. This is the regulator's own announcement and reflects only the CFTC's account; the Michigan court order and Kalshi's filing were not included.