What the Commission actually did
The document is titled Order Staying Emergency Rule Filed by KalshiEX LLC and Directing Kalshi to Fulfill Open Trades Involving Michigan Residents, captioned In the Matter of KalshiEX LLC's Notice Regarding Market Emergency Declaration and Emergency Rule Filing Pursuant to Commission Regulation 40.6(a). The two halves of that title are the two distinct acts, and they rest on different authorities: the stay on Commission Regulation 40.6(c)(1), the direction to fulfil on Section 8a(9) of the Commodity Exchange Act.
The Commission's jurisdictional predicate is stated at the top. Kalshi “obtained designation as a CFTC-regulated contract market on November 3, 2020,” event contracts are “swaps” as defined in the Act, and the Act confers “exclusive jurisdiction” on the Commission over swaps traded on designated contract markets. Everything downstream depends on that chain.
On the merits of the emergency, the order is direct about what it thinks was at stake: allowing the rule to take effect “would risk shattering public confidence by giving traders cause to worry that the trades they execute today may be unwound a week—or a year—later.” It frames the principle as general rather than specific to event contracts: “State courts cannot order the unwinding of executed swap transactions, whether it be a single contract or an entire class of trades,” because if they could, the same logic would reach “forward contracts, futures, and options, not just certain kinds of event contracts.”
It also explains why a stay alone was judged insufficient — the reasoning for the second, less usual half of the order: “Simply staying the Emergency Rule under Commission Regulation 40.6(c) will not necessarily remedy the emergency affecting the markets,” and “[t]he unprecedented forced liquidation of even one executed trade risks market distortions.” The Commission notes in the same passage that the limited size of the affected book — Kalshi had said it could “bear the cost of reimbursement” because “[t]he total number of positions impacted by the specific order is limited” — “does not obviate the market emergency.”
In the press release, Chairman Michael S. Selig put the same point in plainer terms: “A state cannot force a DCM to violate its obligations, and federal law does not permit a DCM to discriminate against a state's residents,” adding that “[c]anceling trades that have already been executed is an unprecedented step that risks a cascading effect on the entire marketplace” and that the Commission “will not allow states or state courts to bully registered entities into violating the Commodity Exchange Act and CFTC regulations” (CFTC, press release 9267-26, 2026-07-14).
The sequence, dated
Sixteen days separate the state order from the federal one, and the intervening steps are what make this different from the other entries in this franchise. This is not two courts disagreeing — it is a state court reaching trades that had already been executed, the exchange moving to comply, and the federal regulator stopping the exchange from complying. Every entry below is quoted or paraphrased from the two CFTC documents:
“On June 29, 2026, the Circuit Court for Michigan's 30th Judicial District granted the State of Michigan's motion for a TRO against Kalshi.” The order prohibits Kalshi from facilitating anything constituting internet sports betting under MCL 432.403(s) for anyone located in Michigan, and requires a geolocation provider licensed by the Michigan Gaming Control Board meeting Technical Bulletin No. 2024-03.
Source: CFTC order
“After Kalshi filed a motion to dissolve or modify the TRO, the court issued a verbal modification requiring Kalshi to close out certain trades entered into by Kalshi traders located in Michigan. The court clarified in a July 6, 2026, correspondence to the parties that the trades must be ‘voided, cancelled and refunded.’” This is the step the Commission later calls unprecedented.
Source: CFTC order
The same day, Kalshi told the CFTC of “an imminent market emergency . . . that may necessitate emergency rules pursuant to [CEA] Section 5c(c), CFTC Regulation 40.6(a), and Kalshi Rule 2.8,” listing suspension of certain contracts for Michigan users, geolocation controls, “the potential need to address open contracts or positions held by persons located in Michigan,” and operational rule changes.
Source: CFTC order
Under the Emergency Rule, “[p]ositions of the identified Michigan-based users will be force-liquidated on the central limit orderbook at current market value as of the date of execution of this Emergency Rule.” Kalshi said that where liquidation value fell below a user's original cost of entry it “will pay the difference to the affected user from Kalshi's operational funds” and “will absorb the entire shortfall,” because “[t]he total number of positions impacted by the specific order is limited.”
Source: CFTC order
The Commission stays the Emergency Rule under Regulation 40.6(c)(1) and, under Section 8a(9) of the Commodity Exchange Act, “directs Kalshi to fulfill the trades in question in accordance with its normal practices.” Its stated reason for doing both rather than only staying: “Simply staying the Emergency Rule under Commission Regulation 40.6(c) will not necessarily remedy the emergency affecting the markets.”
The tags above record who acted, not who was right. For the two federal district orders that went opposite ways in the same week of July, see the Minnesota injunction and the Wisconsin ruling; for the durable state-by-state reference rather than any single dated action, see is Polymarket & Kalshi legal.
Where this sits against the rest of the record
The Commission's own release sets the scale it claims for this dispute. It says that “Michigan is the first state to attempt to interfere directly with executed derivatives transactions,” while placing that against a wider pattern: states “have attempted to bring enforcement actions against CFTC-regulated DCMs in state and federal courts throughout the nation,” and the Commission has sued Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island and Wisconsin, and filed amicus briefs in the Sixth and Ninth Circuits and the Supreme Judicial Court of Massachusetts.
Two of those nine states already have their own dated entries here, and they ran opposite ways within seventy-two hours of each other: Minnesota's ban was enjoined on 27 July 2026, and the Commission was refused the equivalent order against Wisconsin on 29 July 2026. Read together with this one, the record as of 2026-08-01 is a Commission pressing the same jurisdictional theory in many forums and getting different answers — which is a description of the record, not a forecast of where it lands.
One characterisation the order itself makes, which is worth recording precisely because it is unusual: it states that “[t]he merits of the Commission's emergency determination are precluded from judicial review by operation of 5 U.S.C. [§] 701(a)(2),” citing a 1979 Seventh Circuit decision. That is the Commission's position as stated in its own document. We are not in a position to say how a court would treat it, and this page does not.
What we could not verify
An honest gap beats a confident error, so, as of 2026-08-01:
- The Michigan TRO itself.We did not open it. Every detail on this page about the 29 June 2026 order — its terms, its $120,000-per-day geolocation provision, the verbal modification, the “voided, cancelled and refunded” clarification — is the CFTC's description and quotation of a state-court document inside a federal one. First-hand as to the Commission; second-hand as to the Michigan court.
- The closing section of the federal order. The text we retrieved ran to the end of Section III (Findings) and did not include the operative ordering paragraphs, any Commission vote, or a signature block. So this page states no vote, no effective date, no compliance deadline and no calendar dates for the 30-day comment window — only the framework the order recites from 17 C.F.R. § 40.6(c)(2).
- Kalshi's own filings. The 6 July and 12 July correspondence and the emergency rule text are quoted here as the Commission quotes them. We did not obtain the submissions themselves, and we found no statement from Kalshi responding to the stay.
- What happened next. We record no compliance confirmation, no comment-period filings, no appeal and no subsequent Michigan order, because we opened no document showing any. Absence of a record here is not evidence that nothing occurred — only that we did not verify it.
- The state-court case beyond its number. We have Nessel v. KalshiEX LLC, No. 26-1087-CZ, from the order's footnotes, and nothing else. No docket, no subsequent entries, no current posture.
What Monitoring shows — and what it doesn't
Monitoring reports what has been filed, argued and ordered, each with a date and a named source. It does not forecast the outcome of this or any proceeding, does not price it, does not take a position on whether any statute or order should stand, and does not tell any reader whether they may lawfully trade anywhere. Where a regulator characterises a court's order, we attribute the characterisation to the regulator rather than adopting it. Where we could not read a document, we say so rather than describe it.