The Commodity Futures Trading Commission (CFTC) declared a market emergency on August 11, 2026, ordering Kalshi EX, LLC to continue operating under the Commodity Exchange Act. Kalshi EX, LLC responded by notifying the Commission following a complaint filed by New York Attorney General Letitia James in state court. The lawsuit, filed on July 31, seeks a temporary restraining order against Kalshi for offering event contracts nationwide and demands over $36 billion in damages. The CFTC emphasized its duty to ensure uniform national derivative markets and public confidence through resilient operations. Chairman Michael S. Selig stated that New York should not regulate interstate financial exchanges as they are federal financial institutions matching residents across states. Previously, the CFTC had filed lawsuits against multiple states—including Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island, and Wisconsin—and submitted amicus briefs to various appellate courts.

The decision underscores the conflict between state-level attempts to regulate derivatives and the federal mandate placed by Congress. The CFTC maintains that its role requires protecting market integrity and order across state lines, ensuring transactions are matched and cleared centrally. This action follows years of regulatory battles where state attorneys general have challenged the CFTC's jurisdictional reach into interstate financial markets.