CFTC Emergency Order Mandates Kalshi Operations to Prevent Bitcoin Liquidation Risks

Regulators intervene to keep prediction market open, warning that forced closure could trigger simultaneous Bitcoin position exits and expose arbitrageurs to severe one-way risks.

Woofun AI reports that the CFTC issued an emergency directive requiring Kalshi to maintain standard exchange operations under the Commodity Exchange Act. The regulator cited New York State's shutdown attempts as a market emergency, warning that forcing the liquidation of Bitcoin price positions held through the end of 2026 could cause traders to simultaneously close Bitcoin and other asset positions. This action would expose arbitrageurs holding opposite positions to one-way risks. The order also referenced contracts involving the Fed funds rate, traffic in the Strait of Hormuz, and recession timing, while noting a prior ruling by Judge Vernon D. Oliver regarding sports contracts and federal precedence over Connecticut gambling laws.