On Monday, the Commodity Futures Trading Commission (CFTC) announced its intention to withdraw its appeal regarding a federal court ruling that permitted the commodities exchange KalshiEx to facilitate bets on U.S. political elections.
The CFTC disclosed in a filing with the U.S. Court of Appeals for the District of Columbia Circuit that this dismissal was mutually agreed upon with Kalshi, marking a voluntary decision on the commission’s part.
Both parties have reportedly agreed to bear their own legal costs, and Kalshi has committed to forgo all claims related to the litigation.
Finance Newso has reached out to both the CFTC and Kalshi for comments regarding this development.
Earlier this year, Kalshi announced the appointment of Donald Trump Jr., the eldest son of former President Donald Trump, as a strategic advisor to the company.
The CFTC had long been pursuing its appeal following a September ruling from Judge Jia Cobb of the Washington, D.C., federal district court, who ruled in favor of Kalshi. Judge Cobb determined that Congress had not given the CFTC the authority to conduct a public interest review that would allow the agency to prohibit the exchange from offering so-called events contracts pertaining to elections.
Shortly after Cobb’s order was issued, the appeals court placed a temporary hold on it, but eventually lifted that freeze, which allowed Kalshi to accept bets on election outcomes while the CFTC continued to seek a reversal of Cobb’s ruling.
In reaction to the CFTC’s move to drop the appeal, the financial reform advocacy group Better Markets expressed strong discontent, condemning the decision as a “stark betrayal of the public interest.”
Stephen Hall, legal director and securities specialist at Better Markets, criticized the CFTC’s withdrawal, stating, “The CFTC has just voluntarily surrendered its fight to overturn a dangerous lower court decision that allows gambling on the outcome of congressional elections.” He further emphasized that this ruling threatens the integrity of federal elections and could lead to increased market manipulation and losses for investors.
Hall added that the dismissal would leave the lower court ruling in place, establishing a concerning legal precedent. He described the abrupt change in stance, especially after thorough arguments from both sides, as a serious setback for the American public.
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