The Commodity Futures Trading Commission has warned Kalshi of potentially imminent charges over the launch of certain prediction market wagers, according to a person with direct knowledge of the probe. The CFTC is investigating whether Kalshi failed to properly notify the agency about dozens of new products in development.
Kalshi spokesperson Elisabeth Diana said the warning concerns "a procedural error involving the submission of a handful of contracts, many of which weren't live" and that the company is already addressing the issue. A CFTC spokesperson did not immediately respond to a request for comment.
The probe centers on Kalshi's use of the self-certification process, which allows CFTC-regulated financial exchanges to launch new products as soon as the next day if they attest that products comply with certain requirements, including protections against manipulation. The CFTC's express approval is not required under this process.
Kalshi boasts a valuation of $40 billion. Competitor Polymarket, valued at $21 billion, is also under investigation by the CFTC over potential violations of a 2022 settlement requiring it to close its platform to US users.
The investigation has been in the works for months. In July, the CFTC warned prediction market operators against using overly broad language when certifying new products. CME Group CEO Terry Duffy earlier this year raised concerns that prediction market wagers were at risk of manipulation and should not have been allowed to go live.