The U.S. derivatives regulator has escalated a brewing clash with the courts over prediction markets, telling platforms to stop blocking users by state or face consequences. In a formal demand, the Commodity Futures Trading Commission (CFTC) told exchanges that run event-based contracts — from sports and weather to political markets — that they cannot simply cut off access to customers in certain jurisdictions. The notice, which named firms including Kalshi and Polymarket, points to their registration as designated contract markets (DCMs) and argues those federal-designated venues must operate nationwide under derivatives rules, even where courts have ordered them to cease servicing particular states. Operators have 30 days to reopen access to any regions they’ve closed, or to provide the CFTC with a written explanation for why resuming service “is not feasible.” The move sets up a direct regulatory standoff: federal oversight asserting nationwide authority vs. court rulings that have restricted specific platforms’ state-level activity. The outcome could have broad implications for the rapidly evolving prediction-market space — including crypto-native platforms — as regulators, courts and companies test the boundaries between federal derivatives regulation and state enforcement. Read more AI-generated news on: https://app.chaingpt.org/news