Prediction Markets

Utah’s attorney general has sued Kalshi, the prediction-market platform, arguing it operates an illegal gambling operation and describing the firm as the manager of a back-alley gambling den. Utah also declared the activity a public nuisance. The case adds another state-level challenge to event contracts, building on pressure event-contract platforms already face from regulators over whether such products count as gambling or regulated derivatives.

The Block reported on Friday that a federal appeals court ruled Kalshi has not adequately demonstrated that its sports event contracts qualify as swaps under the Commodity Exchange Act, leaving the prediction market platform on the losing side of litigation against Ohio and Tennessee sports betting regulators and widening the split among US federal circuits.

The Wall Street Journal reports that crypto prediction platform Polymarket recently foiled a roughly $10 million fraud attempt. The report reveals that the CEO prioritized business growth over compliance requirements during the company’s rapid expansion. The incident has once again drawn industry attention to prediction market regulation, risk control, and investor protection.

ESMA has formally questioned the EU operating status of prediction market platforms Polymarket and Kalshi, warning of potential authorization gaps under MiFID II and MiCA frameworks. The move signals stricter regulatory scrutiny ahead for the prediction market sector in the European Union.

Prediction market platform Kalshi announced a permanent ban of former Republican Congressman George Santos over alleged rule violations in trading on the platform, highlighting regulatory gray areas.

Summary Prediction market platform Polymarket was found to have a critical price manipulation vulnerability: traders could exploit a five-second window to artificially push prices and extract millions in profits. After months of public warnings from onchain analysts, Polymarket is moving to implement time-weighted average prices. Details According to CoinDesk, the vulnerability stems from Polymarket’s pricing mechanism being too reliant on instantaneous prices, allowing attackers to profit by manipulating prices in extremely short time windows. Onchain security analysts discovered and publicly warned about this issue months ago, but the platform had not taken effective action until now. ...

A Michigan judge denied Coinbase’s bid to block state enforcement of a sports event contract, ruling against the crypto exchange’s attempt to avoid state-level regulation of prediction markets.

Crypto prediction market platform Polymarket is seeking a new funding round at a $20 billion valuation, reflecting intensifying competition in the sector after explosive growth.

A judge has blocked Minnesota from enforcing its prediction market ban, clearing the way for platforms like Kalshi and Polymarket to operate in the state.

Core Summary The US Commodity Futures Trading Commission has filed a legal action against Kentucky over prediction market jurisdiction. This is the latest move by the federal agency against state-level regulatory barriers, highlighting the power struggle between federal and state governments in the emerging fintech sector. Overview Kentucky becomes the latest state to clash with the federal agency over prediction market regulation. Multiple states have previously faced CFTC legal action over similar issues. The agency maintains that prediction markets fall under commodity trading and should be regulated uniformly at the federal level, not by individual state legislation. ...