Prediction market Kalshi now offers perpetual trades on stock and cryptocurrency prices after a federal regulator granted approval. The Commodity Futures Trading Commission allowed the products to move forward.
The approval lets traders take positions on whether stocks and digital assets will rise or fall. Perpetual trades have no fixed expiration date, unlike standard futures contracts.
Two major trading clearinghouses responded by filing lawsuits against the decision. The clearinghouses argue that traders using these products would lack proper protections.
The dispute centers on whether event-based contracts should be treated as financial derivatives or as wagering. That distinction determines which safeguards apply to participants.
Kalshi has positioned the products as a way to short stocks without a traditional brokerage account. The company says the contracts give retail traders broader market access.
Critics contend the structure bypasses rules designed to protect investors from excessive risk. The clearinghouses warn that losses could mount quickly without standard safeguards.
The lawsuits will likely test the limits of the regulator’s authority over novel trading products. A court ruling could reshape how prediction markets offer financial exposure.
