A federal judge in Arizona has issued a temporary restraining order stopping the state from pursuing criminal charges against prediction market company Kalshi, following intervention by federal regulators.
U.S. District Judge Michael Liburdi granted the Commodity Futures Trading Commission’s emergency request during a Friday hearing, effectively halting Arizona’s prosecution of the federally regulated company.
The CFTC had filed suit to prevent individual states from regulating prediction market companies that already fall under federal oversight. The agency announced Judge Liburdi’s decision in a Friday press release.
According to the ruling, Arizona is now barred from moving forward with criminal charges against contract markets that operate under CFTC regulation.
CFTC Chairman Michael S. Selig criticized Arizona’s approach in an official statement, saying: “Arizona’s decision to weaponize state criminal law against companies that comply with federal law sets a dangerous precedent, and the court’s order today sends a clear message that intimidation is not an acceptable tactic to circumvent federal law.”
The case highlights ongoing tensions between state and federal authorities over who has jurisdiction to regulate emerging financial markets.
