Kalshi has fueled a billion-dollar dispute over sports betting regulation as trading activity on its platforms continues to surge.

According to a report from Semafor, a coalition that includes the Indian Gaming Association, the American Gaming Association, and labor organizations has urged the US Senate to add language to the CLARITY Act explicitly preventing sports and casino-style event contracts from being offered through prediction market platforms.

In a letter to lawmakers, the groups argued that sports betting should remain outside the jurisdiction of the Commodity Futures Trading Commission and continue to be governed by existing state and tribal regulatory systems.

The coalition stated that prediction markets have enabled what it described as the largest expansion of gambling in US history over the last 18 months without direct legislative approval.

The dispute arises as Kalshi continues expanding beyond its original prediction market business.

Earlier this week, the company disclosed that its perpetual futures products generated more than $5.5 billion in trading volume within two weeks of launch. The platform currently offers 11 crypto-linked perpetual futures contracts and is discussing additional products with regulators.

Gaming groups challenge federal oversight of sports contracts

Pressure from gaming organizations has increasingly centered on the CFTC’s position that prediction markets fall under federal commodities regulation. Under Chair Michael Selig, the agency has supported platforms such as Kalshi and Polymarket in legal disputes involving state gaming regulators.

In their letter, the organizations argued that the CFTC was established to oversee commodities and derivatives markets rather than sports wagering. They contended that the agency lacks the operational framework and expertise required to regulate nationwide sports betting, particularly in areas where state and tribal authorities already maintain oversight.

Financial concerns have also become part of the debate. Data cited by the American Gaming Association estimates that state gaming authorities have lost roughly $1.08 billion in tax revenue since prediction market platforms began offering sports-related event contracts.

Meanwhile, lawmakers continue negotiating the final shape of the CLARITY Act, legislation designed to transfer portions of digital asset regulatory authority from the Securities and Exchange Commission to the CFTC. Although the bill passed the House of Representatives in July 2025, discussions over stablecoin yield products, ethics provisions, and tokenized equities have delayed final approval.

Kalshi expands crypto derivatives despite legal uncertainty

While the political fight intensifies, Kalshi has continued adding products tied to digital assets. Following regulatory approval of its BTCPERP contract on May 29, the company launched CFTC-approved Bitcoin perpetual futures in the United States and later expanded into XRP and Solana contracts.

The contracts allow traders to maintain positions without expiration dates while using funding payments designed to keep prices aligned with underlying spot markets. Although the structure can support continuous trading activity, leverage may amplify losses during periods of sharp market volatility.

Additional filings involving Dogecoin, Shiba Inu, Stellar, Hedera, and Hyperliquid’s HYPE token have also advanced through regulatory review processes, indicating that Kalshi’s crypto derivatives lineup may continue to grow.

Legal observers cited in the Semafor report believe the conflict between federal and state regulators could ultimately reach the U.S. Supreme Court.

The possibility stems from competing interpretations of the court’s 2018 Murphy v. National Collegiate Athletic Association ruling, which gave states authority over sports gambling, while Kalshi, Polymarket, and the CFTC maintain that event contracts offered on prediction market platforms qualify as swaps subject to federal oversight.

That philosophy could influence Wednesday’s meeting. Bank of America said there is a chance Warsh declines to submit his own projections to the Fed’s Summary of Economic Projections, or SEP, a move that would highlight his long-standing criticism of the central bank’s forecasting process.

“If you’re not very good at something, you should do less of it,” Warsh said at a State Street conference last year, according to the Journal. “These forecasts have been abysmal. My dots wouldn’t be perfect either, so I wouldn’t give them.”

The SEP’s “dot plot,” which shows where policymakers expect interest rates to move, has become one of the most closely watched pieces of Fed communication. Bank of America, in line with the market, expects this week’s projections to show rates remaining unchanged through 2026 before modest cuts in 2027 and 2028.

The investment bank also expects policymakers to acknowledge rising inflation risks while signaling a lower willingness to look through price shocks than in recent years.

Warsh’s first press conference as chair is likely to attract the most scrutiny. Bank of America expects him to strike a patient tone, arguing that recent inflation pressures linked to geopolitical events, such as the conflict involving Iran, may prove temporary, while avoiding any signal that rate cuts are imminent.

“For most people, the biggest investment, their nest egg, is their home equity. Find a way to transform that into some kind of bitcoin exposure to a larger or to a smaller degree,” he said. “So then you can bet on the asset of the house appreciating, the house asset appreciating, and the bitcoin asset appreciating.”

Salinas points to bitcoin’s long-term appreciation relative to real estate as evidence for his view. In January 2016, the price of bitcoin hovered around $400. A house in Central London sold for an average price of $1.6 million or 4,000 bitcoin. With home prices remaining basically unchanged ten years later, that same purchase would require less than 30 bitcoin.

For Salinas, that comparison illustrates why he believes bitcoin outperforms traditional stores of value such as real estate over the long term.

“It’s an asymmetrical bet to the upside,” he said. “The more people find out about bitcoin, the more demand there will be.”

The ‘fiat fraud’

Salinas, who has emerged as a potential presidential candidate in Mexico for the 2030 election, traces his deep belief in fiat devaluation to a time long before digital currency even existed. Back when then-President Richard Nixon severed the U.S. dollar’s direct convertibility into gold, ending the gold standard.

TLDR:

• The Fed voted 12-0 to hold rates at 3.5–3.75%, but raised inflation forecasts and slowed its rate-cut outlook.
• Bitcoin fell 2.2% to $64,150 while Ether dropped 3.6%, with XRP and Solana each losing around 3%.
• The GMCI 30 dropped 2.6%, pushing its year-to-date decline to nearly 36% across the broader market.
• Warsh ditched Powell’s forward-guidance style, opting for shorter, fact-based statements with no market direction.

Crypto markets retreated Wednesday after the Federal Reserve held interest rates steady but delivered a hawkish policy outlook.

The Federal Open Market Committee voted 12-0 to maintain its target rate at 3.5% to 3.75%. The decision came during Kevin Warsh’s first meeting as Fed chair.

Updated projections pointed to slower rate cuts ahead, rattling risk assets across the board. Bitcoin, Ether, and several altcoins fell between 1% and 3% following the announcement.

Markets React to a Hawkish Policy Signal

Bitcoin traded near $64,206 as of writing, down roughly 2.54% over the prior 24 hours. Ether shed 2.8%, while XRP and Solana each declined around 3% according to CoinGecko data. Hyperliquid’s HYPE token, which hit a new all-time high just a day earlier, pulled back 1.5% to $72.

The GMCI 30, tracking the 30 largest cryptocurrencies by market cap, dropped roughly 2.6%. That move extended its year-to-date decline to nearly 36%. Traditional safe-haven assets weren’t spared either, with gold sliding 2.2% and silver shedding a sharper 4%.

Matt Mena, senior crypto research strategist at 21Shares, framed the broader picture: “Taken together, the picture is one of a crypto market absorbing a hawkish macro backdrop while rotation and genuine demand continue to surface in the strongest names.”

The rate hold itself was broadly anticipated and mostly priced in before the meeting. What caught markets off guard was the tone of the updated Summary of Economic Projections, which flagged persistent inflation concerns despite easing geopolitical tensions and softer energy prices.

Warsh Charts a New Course for Fed Communication

Wednesday’s meeting marked more than just a rate decision—it offered the first look at Warsh’s communication style as chair.

His policy statement was notably shorter than those issued under former chair Jerome Powell. It also dropped the forward-guidance language that Powell used consistently throughout his tenure.

Warsh described the new format as focused on presenting “the facts” rather than steering market expectations. That approach aligns with his long-standing skepticism toward forward guidance, which he has argued ties the Fed’s hands unnecessarily.

Mena addressed the weight of the occasion directly: “The Fed’s decision to hold rates was fully expected, but it carried unusual weight as the first meeting chaired by Kevin Warsh.”

He added that “the real signal came from the updated projections,” pointing to revised forecasts that suggest policymakers remain wary of inflation pressures despite some easing on the energy front.

The committee’s updated dot plot marked a meaningful shift from March projections. Policymakers now see a slower path toward lower rates than they did just three months ago.

That pivot, combined with Warsh’s leaner communication style, set a more cautious tone for markets heading into the second half of 2026.

Audits are accomplishing exactly what they are designed to do — discovering errors in the code. And they’re working. Fewer attacks than before take advantage of faulty code to steal platform funds.

The problem, however, is that we’re seeing a growing disconnect between what audits examine and what attackers actually exploit. Today, the industry’s largest losses don’t actually originate from traditional smart contract vulnerabilities. Rather, they come from compromised private keys, governance manipulation, insider compromise, malicious dependency updates and operational failures.

As brilliant as they are at identifying code vulnerabilities, traditional audits cannot prevent a developer from falling victim to a phishing campaign. The best code in the world can still sit atop vulnerable operational infrastructure.

In fact, our research shows that, when measured by financial damage, these operational exploits are often far more devastating than code vulnerabilities themselves. The industry has invested enormous resources into reducing smart contract risk, but the costliest attack vectors remain comparatively under-defended. It’s like the industry is still focused on defending against the last generation of attacks, whereas malicious actors have moved on to different strategies.

Audits alone create a dangerous illusion of safety

Platforms frequently advertise the number of audits they have completed, the reputation of the firms they hired, or the volume of findings identified during review. These have become shorthand indicators for whether a project is safe.

Moody’s Ratings is rolling out its credit ratings to Solana (SOL), allowing issuers of tokenized bonds and other fixed-income securities to embed the firm’s assessments directly into blockchain-based assets.

The move, announced Wednesday in partnership with Solana-focused tokenization specialist Alphaledger, expands Moody’s Token Integration Engine (TIE) to a major public blockchain after its first deployment earlier this year on the institutional-focused Canton Network (CC).

The move builds on a pilot project completed last year, when they demonstrated how municipal bond ratings could be attached directly to tokenized securities on Solana.

Tokenization — the process of creating blockchain-based versions of traditional assets — has become one of the fastest-growing areas of finance. Asset managers including BlackRock, Franklin Templeton and Apollo have launched tokenized funds and credit products, while Boston Consulting Group and Ripple estimate the market could reach $18.9 trillion by 2033.

As tokenization gains traction, financial firms are increasingly focused on bringing the infrastructure surrounding traditional assets onto blockchain rails. That includes ownership records, pricing data, compliance information and credit ratings.