--- title: "The US Government Just Issued a Stark Warning to Kalshi" description: "Federal regulators recently announced a bombshell probe into a top prediction market, potentially upsetting years of self-regulation." date: "2026-11-11" modified: "2026-11-11" authors: - name: "Joe Wilkins" job_title: "Correspondent" link: "https://futurism.com/authors/jwilkins.md" url: "https://futurism.com/future-society/us-government-cftc-kalshi-prediction-market-regulation" categories: - "Blockchain" - "Finance" - "Future Society" --- # The US Government Just Issued a Stark Warning to Kalshi ![The logo of Kalshi displayed on a smartphone in front of a laptop.]() *Shutterstock* As Democrats take the reins in Washington DC this January, one of [their key targets]() looks to be the wide world of prediction markets, which have been allowed to run roughshod under the Trump administration. Adding to the industry's woes, the US Commodity Futures Trading Commission just issued a warning to the prediction market Kalshi, informing it of imminent charges stemming from an investigation into the company's experimental financial products. As [*Politico* reports](), the investigation stems from dozens of products and services which Kalshi allegedly began offering consumers without notifying the CFTC. The exact charges coming down the pike aren't yet known, but as one anonymous insider told *Reuters*, the notification seems to suggest they're coming soon. For its part, Kalshi told the publication the CFTC's warning is about little more than a "procedural error involving the submission of a handful of contracts, many of which weren't live." "We are already addressing the issue," as a Kalshi spokesperson told *Politico*. According to further reporting [from *CNBC*]() — which has a [commercial relationship]() with Kalshi, it's worth noting — the investigation stems from the company's sale of "event contracts" related to the weather. Event contracts are [rule-bending prop bets]() dressed up as financial instruments, which let gamblers place bets on the outcome of specific "yes or no" questions related to real-world happenings. For example, one weather event contract trading on Kalshi right now asks whether or not the [rain total in Los Angeles]() this month will exceed one inch, two inches, or three inches, with each choice trading under different odds (trading volume for that particular market stands at $28,000 this month, for those wondering.) Under Donald Trump's second administration, prediction markets have been allowed to self-certify these event contracts without CFTC involvement, as long as they follow the rules of the US Commodity Exchange Act. With this move, it seems the CFTC has found something that violates that norm — though what the offending conduct was is unclear. Either way, it could shape up to be a major reversal over years of self-regulation, a free-wheeling policy environment which coincided with [windfall profits]() for companies running prediction markets. The pending enforcement action comes on the heels of an unrelated federal probe into rival prediction market Polymarket, which was found to be tangled up in a [$10 million off-shore fraud scheme](). **More on gambling:** *["Prediction" Markets Were Comically Wrong About the Brazilian Election]()* ## Author At Futurism, I focus on the intersection of technology and power — examining the economics, history, and politics behind today’s dystopian headlines. As a writer, I’m interested in topics ranging from AI’s impact on labor to startups nobody asked for. My prior work includes bylines in Jacobin, Verso, and Blue Labyrinths. My work for Futurism has been cited by publications including Forbes, The Guardian, MIT Technology Review, Time, The Nation, Mother Jones, The Verge, and Wired. I grew up in Michigan, attending Central Michigan University as well as Ball State University, where I earned a master of music. I now live in Brooklyn with my girlfriend and our cat Ziti. On weekends, you can find me hunched over a cold pint arguing geopolitics with the other transplants. ### Author social links [Bluesky]() ## More - [Hawk Tuah Girl Admits She Knew Essentially Zero About Crypto When Her Disastrous Meme Coin Launched]() - [Sam Bankman-Fried Has Been Banished to Oklahoma]() - [Blockchain Slumlord Startup Implodes in Real Time]() - [Crypto Guys Who Bought a Huge Gold Trump Statue Now Have a Problem]() - [This Country Plans to Be the First to Accept Bitcoin as Legal Tender]() - [A Harvard Scientist Is Selling His Genetic Code as an NFT]() - [South Korea Has Banned the Sale of All New Cryptocurrencies]() - [Months Before Collapse, FTX Employees Discovered a Mysterious Backdoor]()