Kalshi Gets CFTC OK to List Precious Metals Futures

Kalshi secured regulatory approval from the Commodity Futures Trading Commission to list precious metals-related perpetual futures on its platform, as reported by CNBC on September 10. The CFTC granted the listing of gold and silver perpetuals, the report stated. Kalshi achieved approval for perpetual futures tied to cryptocurrencies in May, with those contracts generating $44 billion in notional volume since then, according to the report.

Udesh Jha, chief risk officer at Kalshi Klear, the exchange’s clearing house, explained that the company sought to introduce precious metals as its next perpetual futures offering due to strong interest in the commodities, the report said. Jha highlighted that metals, particularly gold and silver, possess a compelling narrative due to inflation concerns, per the report.

Demand for Kalshi's commodity-related event contracts, encompassing metals and oil, exceeded $400 million in trading volume within a seven-month period, which is half the time it took for its crypto event contracts to reach the same milestone, the report said. Perpetual futures, or "perps," are futures-style contracts devoid of expiration and the requirement for investors to own the underlying asset; instead, they monitor the price of an asset, incorporating a funding mechanism to maintain alignment between the contract and market price, the report explained.

Kalshi is also seeking approval for contracts related to U.S. equities, industrial metal copper, and currencies. This latest CFTC approval represents the first non-crypto related contract granted, according to the report. In related prediction markets news, a federal appeals court ruling favored state gaming regulators in their jurisdictional dispute with the CFTC, affirming that Nevada has the authority to subject Kalshi's sports event contracts to its gambling laws.

This decision adds to the ongoing conflict among federal courts regarding whether sports-related prediction contracts are financial derivatives governed solely by the CFTC or conventional sports wagers subject to state regulation. The ruling, reported by PYMNTS on August 31, contrasts with a previous April decision in New Jersey, which denied the state's authority to regulate Kalshi's sports contracts.

The resulting discrepancy creates favorable conditions for the Supreme Court to potentially resolve a significant dispute with implications for prediction markets and the traditional jurisdiction of states to regulate gambling.