US Regulator Sues New York to Protect Prediction Markets from State Interference

In its latest effort to assert nationwide regulatory authority, the US Commodity Futures Trading Commission has filed a lawsuit against New York. The move comes after New York took action against Coinbase, Gemini, and Kalshi, claiming their prediction market contracts breached state gambling laws. The CFTC argues that federal law grants it exclusive jurisdiction over commodity futures, options, and swaps traded on federally regulated exchanges, thus preempting state law. However, 37 state attorneys general have countered that this stance threatens their ability to protect citizens. The CFTC has also sued Arizona, Connecticut, and Illinois over similar issues, with Chairman Mike Selig prioritizing the protection of prediction markets. New York officials have responded, stating they are enforcing state laws to safeguard consumers and will continue to defend their laws in court.