Morning Minute is a daily newsletter written by Tyler Warner. The analysis and opinions expressed are his own and do not necessarily reflect those of Decrypt.
GM!
Today’s top news:
- Crypto majors chop ahead of CPI, ETH leads; BTC at $64k
- SEC plans to move forward with crypto rulemaking Friday, including tokenized securities
- Robinhood Chain does 10x the revenue of Base, TVL nears $500M
- Harmony exploit led to 26% of the supply minted
- CFTC invokes emergency authority to keep Kalshi running in NY State
⚖️ The CFTC Shields Kalshi From New York, Just as Its Revenue Doubles
The federal government just overruled a state trying to shut down a prediction market.
The CFTC invoked “emergency authority” on Tuesday to order Kalshi to keep operating in New York, days after Attorney General Letitia James sued to block its sports contracts. Kalshi asked the regulator to step in, and it did.
The stakes are enormous. According to The Information, Kalshi has topped a $4 billion annualized revenue run rate, double its level from two months ago, and is raising at a $40 billion valuation. So states are trying to rein it in exactly as it becomes one of the fastest-growing companies in finance.
New York argues sports prediction markets are gambling that dodged state licensing and taxes, revenue that it says funds schools and problem-gambling programs. The CFTC counters that these are federally regulated swaps. Chairman Mike Selig, a crypto-friendly Trump appointee, said “Congress did not intend for derivatives exchanges to be regulated under a patchwork of state gaming laws,” accusing New York of trying to make the contracts “waste away under its iron curtain of state gaming laws.” He argued these are interstate financial markets that New York “has no business” regulating.
It’s a pattern now. This is the CFTC’s third intervention for Kalshi after a similar move in Michigan, and it has separately sued New York outright. But the underlying cases are unresolved, and a judge already ruled against Kalshi’s bid to stop the suit. All while Kalshi just keeps printing increasing revenue and raising at higher and higher valuations.
