An exchange CLO: US court has ruled that Kalshi event contracts are swaps regulated by the CFTC.
According to Odaily, the chief legal officer of a certain exchange, paulgrewal.eth, posted on X stating that a U.S. court pointed out in a related ruling that ordinary users might consider Kalshi's products to be "similar to sports betting, or even indistinguishable." However, the court emphasized that this perception does not change its legal nature, because "a game lasting three hours, and the Titans winning that game, both constitute the occurrence of an event." The related contracts are still classified as "swaps," and by law fall under the exclusive jurisdiction of the U.S. Commodity Futures Trading Commission (CFTC). paulgrewal.eth believes that this ruling means that even if a product is similar in form or experience to sports betting, as long as its structure meets the definition of a swap and it is traded on a regulated exchange, it remains subject to the CFTC regulatory framework.
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