Caterpillar CEO Joseph Creed disclosed his sale of $26.2 million worth of stock on Tuesday, after exercising an options package four and a half years early. 

He sold 32,401 shares on the New York Stock Exchange on August 28, emptying his oldest outstanding tranche of options that had a March 2031 expiration date.

The options had a $219.76 strike price — allowing Creed to exercise 72% below the current stock price that regular investors have to pay today.

Creed’s proceeds of $26.2 million had a weighted average of $808.98 per share, slightly below the filing’s $812.98 valuation for shares surrendered to cover his exercise price or tax liability.

He disposed of 12,002 shares under a filing code for paying an exercise price or tax liability. Their value almost exactly matched the grant’s $9.76 million exercise cost.

Even after the incredible payday, Creed’s August 28 sale only reduced his 2021-vintage options grant to zero. In addition, Caterpillar’s proxy filing lists another 110,651 option grants from years 2022-2025, including vested and unvested compensation. 

Moreover, he retained ownership of 34,555 shares of stock, plus another 11,839 shares in his 401(k) retirement account.

XRP Ledger order-book volume has increased 79% year over year in the second quarter of 2026, even as the number of daily trading accounts has fallen 40%, according to Evernorth.

Evernorth’s Q2 2026 XRP Liquidity Report showed that fewer accounts were responsible for heavier trading activity during the three months through June, creating a more concentrated market even as the amount of value held on the network continued to rise.

Order-book activity averaged 3.57 million XRP per day during the quarter, compared with about 1.99 million XRP a year earlier. Daily accounts initiating order-book trades declined from 1,864 to 1,111 over the same period, leaving each participating account to trade an average of 3,217 XRP per day.

A year earlier, the average account traded 1,072 XRP daily. Evernorth’s figures therefore put the increase in volume per trader at close to threefold, indicating that larger orders offset the drop in the number of active participants.

XRP Ledger trading has become more concentrated

Total decentralized exchange volume on the XRP Ledger averaged 4.42 million XRP per day in Q2, about 20% above the same quarter in 2025, the report said. Order books accounted for 81% of that activity, up from 54% a year earlier.

Compared with the first quarter of 2026, however, total trading volume decreased by 16%. Evernorth described Q1 as an unusually active period, making the yearly and quarterly comparisons important when assessing whether the second-quarter pace can continue.

Average daily trading accounts across the XRP Ledger DEX fell to about 2,435, while order-book accounts recorded a steeper 40% decline. The report did not identify individual traders or determine how much of the remaining activity came from institutions, market makers, or automated strategies.

Institution-focused infrastructure may have contributed to the concentration, according to Evernorth, after permissioned domains and permissioned trading features became available in February. Such tools allow approved participants to transact within controlled environments, although the report did not assign a specific portion of Q2 volume to those venues.

The reduced account count also extended beyond trading. Daily transacting accounts averaged 16,587, while new accounts averaged 2,783 per day, with both measures down about 25% year over year.

Evernorth compared the decline with weaker activity across other crypto networks. According to the report, on-chain exchange volume across seven major programmable networks fell 46% from the previous year, while transaction fees paid on Ethereum, BNB Chain, Base, Arbitrum, Polygon, Optimism and Avalanche collectively dropped 38%.

Account counts are among the report’s most retail-sensitive measures, Evernorth said. The simultaneous decline across multiple chains therefore placed XRPL’s lower participation within a marketwide contraction in trading rather than attributing it solely to conditions on the ledger.

RLUSD liquidity has accelerated on XRPL

Ripple USD activity produced one of the quarter’s largest yearly increases. Evernorth found that average RLUSD balances on the XRP Ledger reached $539 million, rising 642% from $73 million in Q2 2025.

Value moved through RLUSD increased 925% over the same period, while the XRP Ledger’s share of the stablecoin’s total supply grew from 20% to 34%. The report measured quarterly averages, meaning its $539 million balance figure differs from later point-in-time supply readings.

By the end of June, RLUSD supply on XRPL had reached about $676.9 million. The stablecoin continued expanding after the reporting period and passed $1 billion in circulating supply on the ledger on Aug. 28, when it represented about 82% of XRPL’s stablecoin market.

Ripple’s stablecoin also crossed $2 billion in total market value across supported networks in late August, less than two years after its December 2024 launch. As crypto.news previously reported, around $963 million was issued on XRPL, and approximately $1.05 billion was held on Ethereum when the total passed that level.

Because RLUSD seeks to maintain a value of $1, increases in its market capitalization mainly represent additional issuance rather than token price gains. Ripple reported $1.98 billion in reserve assets against $1.87 billion in circulation as of Aug. 20, with monthly independent attestations prepared by Deloitte.

Earlier in 2026, Evernorth reported that RLUSD pairs had generated more than $2.5 billion in XRPL trading activity since launch. The RLUSD/XRP pair contributed about $900 million over six months, while the stablecoin’s share of on-chain trading increased from below 1% to about 12%.

The earlier liquidity findings also placed monthly RLUSD trading transactions near 1 million. Each transfer or trade settling natively on XRPL requires network fees paid in XRP, although transaction activity does not automatically show how much lasting demand it creates for the token.

During Q2, RLUSD also expanded through Wormhole’s Native Token Transfers system to Base, Optimism, Ink, Unichain and the XRPL EVM sidechain. Ripple already supported the stablecoin natively on XRPL and Ethereum.

Value held on XRPL has reached a quarterly record

Average value held on the XRP Ledger rose to $4.26 billion during Q2, according to Evernorth, setting the highest quarterly reading in the report’s series. Six quarters earlier, the comparable figure stood at $99 million.

The measure increased in every quarter across that period, even when trading participation weakened. It includes value represented by issued assets on the ledger and is separate from XRP’s total market capitalization, which tracks the circulating token supply multiplied by its market price.

Tokenized assets and stablecoins contributed to the increase. A portion of a tokenized U.S. Treasury fund also completed its on-ledger asset settlement in under five seconds during the quarter, although the reported timing covered the blockchain leg rather than the entire banking and payment process.

RLUSD’s growth formed a large part of the asset increase, while XRP produced a strong market move after Q2 ended. The token gained about 37% in August, rising from a 2026 low of $0.9874 on Aug. 15 to a six-month high of $1.6963 on Aug. 22 before moving back into the $1.35 to $1.50 range near month-end.

U.S.-listed spot XRP exchange-traded funds recorded $110.49 million in net inflows during the week ending Aug. 28, their highest weekly total of 2026. Seven funds had accumulated more than $1.66 billion in net inflows by that point, while combined August trading volume reached $723 million.

Evernorth’s U.S. listing ties the data to public investors

Evernorth’s report also carries relevance for U.S. investors because the Ripple-backed company is seeking to become a publicly traded XRP treasury business through a merger with Armada Acquisition Corp. II.

Under an amended SEC registration, the proposed company expects to list on Nasdaq under the ticker XRPN if the transaction closes. Investor commitments exceed $1 billion and include Ripple, SBI Holdings, Pantera Capital, Kraken, and Arrington Capital.

Evernorth previously disclosed $387.1 million in XRP holdings, while Ripple contributed more than 126.7 million XRP to the treasury plan. The company has also said it plans to operate XRPL validators, use RLUSD in institutional decentralized finance services, and support tokenized real-world assets.

The SEC must declare the registration statement effective before Armada Acquisition Corp. II shareholders can vote on the business combination. The filing remained under SEC staff review, with the regulator providing comments on the proposed transaction.

Bitcoin has gained roughly 22% over the past month, but Nansen analyst Nicolai Søndergaard has warned that weak spot flows, divided whale positions, and ETF withdrawals have yet to confirm a new bull market.

Bitcoin’s 22% recovery lacks spot confirmation

Nansen senior research analyst Nicolai Søndergaard told crypto.news that Bitcoin’s market structure has improved after its 22% monthly recovery, though several flow indicators have stopped him from declaring the start of a confirmed bull phase.

Positive daily and weekly trends suggest Bitcoin has moved past the weakest part of its previous decline, according to the analyst. More recent data have produced a less convincing picture, with BTC trading below its seven-day average while short-term momentum remains weak.

“The recovery is real, but spot flows haven’t confirmed the bull market yet,” Søndergaard said.

Labelled entities tracked by Nansen sent a net 3,700 BTC to exchanges during the past week. Because exchange deposits can precede sales, the analyst included the increase among the factors limiting his confidence in the rally, although transfers to trading platforms do not always lead to immediate selling.

US-listed spot Bitcoin exchange-traded funds also recorded around $236 million in withdrawals in the latest reading cited by Søndergaard. The reversal followed a period of stronger institutional activity during August, when ETF demand supported Bitcoin’s advance from below $65,000 to above $80,000.

As previously reported by crypto.news, Bitcoin gained approximately 24% in August, delivering its strongest performance for the month since 2017. US spot ETFs attracted $1.92 billion during their strongest weekly run since October 2025, while $6.55 billion in short liquidations accumulated across two weeks.

The later outflow does not erase the earlier buying, but Søndergaard said the market still needs consistent spot demand before the recovery can qualify as a lasting cycle turn.

“That combination suggests the recovery still lacks consistent spot-flow confirmation,” he said, referring to ETF withdrawals, exchange deposits and weaker short-term momentum.

Whale positions leave Bitcoin exposed in both directions

Large Bitcoin traders have not adopted one clear position during the recovery, according to Nansen’s data. Whales tracked across the firm’s monitored addresses remain slightly net long, while accounts trading large notional amounts on Hyperliquid hold heavy short exposure.

Funding rates remain positive but moderate, indicating that traders holding long perpetual-futures positions are paying shorts without reaching the elevated levels commonly associated with an overcrowded trade. At the same time, declining open interest shows that total derivatives exposure has contracted, while taker-flow data point to continued market selling.

According to Søndergaard, the combination creates the conditions for a short-covering bounce because lower-timeframe momentum has already entered oversold territory. A price increase could force bearish traders to close positions by purchasing Bitcoin, adding fuel to an advance even without an immediate increase in spot buying.

Such a move would not automatically confirm a breakout, he added, because leverage-driven buying can fade after short positions have been closed.

Long traders face a separate risk if Bitcoin loses $76,400, which the analyst identified as an important downside level. A break below it could pressure leveraged bullish positions and weaken the local-bottom case.

Bitcoin recently traded near $76,500 after retreating from levels above $81,000. A recent market assessment identified $76,350 as a nearby support area, with deeper downside levels around $74,500 and $72,000 if sellers regain control.

Although both analyses place support in a similar region, Søndergaard’s test also depends on the type of demand behind any rebound. Nansen would view stronger spot volume differently from a rise led mainly by perpetual futures and forced position closures.

Bitcoin’s $80K test requires stronger ETF demand

For the recovery to become more durable, Bitcoin must first reclaim and hold the $77,400–$77,650 range, according to Søndergaard. A successful move through that area would bring the $80,000 level back into focus after several failed attempts to remain above it.

Stronger spot volume and improving ETF flows would provide the confirmation the analyst is seeking. Funding would also need to remain moderate as open interest expands gradually, a combination that would show traders are adding exposure without creating an immediate leverage imbalance.

“If that happens while funding stays moderate and open interest grows gradually, I would see the recovery as becoming more durable and expect broader participation across crypto.”

A renewed rejection at $80,000 would produce a different signal if exchange inflows remained elevated and derivatives exposure rebuilt without fresh spot demand. Under that scenario, Søndergaard would consider the rally increasingly dependent on leverage and vulnerable to another correction.

Strategy has taken a more aggressive position despite the unresolved market signals. The company purchased 4,603 BTC for $369.7 million between Aug. 24 and Aug. 30, ending a pause of more than two months.

According to an Aug. 31 filing with the US Securities and Exchange Commission, Strategy paid an average of $80,318 per coin, including fees. The transaction increased its holdings to 845,050 BTC, acquired for $63.73 billion at an average cost of $75,412.

Strategy funded the purchase through its at-the-market common-stock program, selling more than 4.5 million MSTR shares for $602.8 million in net proceeds. Of the remaining capital, the company used $151.8 million to repurchase STRC preferred shares, allocated $50.7 million to STRC dividends, and added $30 million to unrestricted dollar cash.

Chief Executive Phong Le has said financing costs, rather than Bitcoin’s trading price alone, determine the company’s purchase decisions. Speaking as Bitcoin approached $80,000, Le described the market as a “pretty heavy bull market” and said Strategy intended to keep buying regardless of price.

US jobs and Treasury yields add another test

Macroeconomic conditions have also limited Nansen’s confidence, with the US 10-year Treasury yield trading near 4.80% as rising oil prices and inflation concerns pushed bond yields higher.

Higher real yields increase the return available from inflation-adjusted government debt, which can reduce demand for assets that do not generate income. Søndergaard cited the yield environment as one of the constraints facing Bitcoin, alongside stablecoin supply that Nansen measured at roughly $310 billion with little recent growth.

Federal Reserve policy expectations have moved toward another rate increase following Chair Kevin Warsh’s Jackson Hole address. After his remarks, Bitcoin fell from above $80,000 to around $79,200, while prediction-market traders raised the estimated probability of a 2026 increase to 68%, according to an earlier market report.

Fresh labor data have since complicated the outlook. ADP reported that US private employers added 38,000 jobs in August, below economists’ forecasts and down from a revised 46,000 in July. Manufacturing lost 17,000 positions, while professional and business services shed 16,000.

The Bureau of Labor Statistics is scheduled to publish the official August employment report on Sept. 4 at 8:30 a.m. Eastern Time, including nonfarm payrolls, unemployment, and wage-growth data.

Coinbase has expanded its Canadian derivatives offering with regulated crypto futures for eligible sophisticated and institutional traders. The rollout adds perpetual and dated contracts while extending access to Bitcoin, Ethereum, Solana, and other digital assets. Coinbase also added commodity and index futures as it broadens its financial services across international markets.

Bitcoin Futures Expand Canadian Derivatives Access

Coinbase Financial Markets now offers Canadian clients access to 23 perpetual and dated crypto futures contracts. The products cover Bitcoin, Ethereum, Solana, and 20 other digital assets through the regulated derivatives platform. As a result, eligible traders can use futures to hedge positions or trade market movements.

Bitcoin futures provide exposure to Bitcoin prices without requiring direct ownership of the underlying asset. Meanwhile, perpetual contracts allow traders to maintain positions without a traditional expiration date. Dated futures settle at specified times, giving users different tools for managing market exposure.

Coinbase also offers nano-sized contracts, which reduce the capital required to enter certain positions. Traders can take long or short positions, while available leverage reaches up to 10 times. During the introductory period, Coinbase charges 0.02% per trade plus $0.11 per contract.

Ethereum Futures Broaden Market Tools

Ethereum futures form part of Coinbase’s expanded Canadian crypto derivatives lineup. The contracts give eligible participants another method for managing exposure to Ethereum price movements. Furthermore, traders can combine perpetual and dated contracts with existing spot market positions.

Coinbase Financial Markets operates as a futures commission merchant registered with the U.S. Commodity Futures Trading Commission. In Canada, the company provides the contracts through an international exemption under applicable securities rules. However, Canadian access remains restricted to eligible sophisticated and institutional market participants.

The expansion follows growing demand for regulated derivatives products across digital asset markets. Coinbase reports that global crypto derivatives volume has reached about 4.4 times spot trading volume. Consequently, regulated futures can provide Canadian market participants with broader tools for portfolio management.

Solana Futures Support Coinbase’s Wider Expansion

Solana joins Bitcoin and Ethereum among the digital assets covered by Coinbase’s Canadian futures offering. The addition gives eligible traders another major crypto market through perpetual and dated contracts. At the same time, the rollout extends Coinbase’s push into a wider financial marketplace.

The Canadian derivatives launch also includes five commodity futures tied to gold, silver, and oil. Coinbase has additionally introduced index products, including COIN50, alongside its crypto and commodity contracts. Therefore, the platform now connects several asset classes through one derivatives offering.

Coinbase Canada has operated as a restricted dealer since April 2024 and continues to pursue CIRO dealer status. Webull Canada has also selected Coinbase’s Crypto-as-a-Service platform for crypto trading and custody services. Meanwhile, Coinbase has begun expanding U.S. stock trading to eligible customers in the United Kingdom.

The developments support Coinbase’s broader strategy of combining crypto with traditional financial products. Its international expansion now covers derivatives, equities, commodities, custody, and other financial services. With the Canadian launch, Coinbase further strengthens its position in regulated digital asset markets.

Solana’s plan to double its annual disinflation rate has drawn criticism from SOL Strategies CEO Michael Hubbard, who has argued that the network’s current inflation of about 4% to 4.5% does not justify an accelerated reduction.

Solana inflation cut has come too early, Hubbard says

Michael Hubbard, CEO of Solana infrastructure and treasury company SOL Strategies, told crypto.news that the inflation change was premature and had been pushed through before its effects on network participants were fully understood.

SGP-0002, known as Double Disinflation, would increase the rate at which Solana’s inflation falls each year from 15% to 30%. The proposal retained the network’s existing terminal inflation rate of 1.5% but shortened the estimated time needed to reach it from 5.7 years to about 2.8 years.

According to Solana’s final governance tally, SGP-0002 received 176.29 million SOL in support, equal to 67% of participating stake. Another 66.19 million SOL opposed the proposal, while 20.63 million SOL abstained. Participation reached 60.7% of the eligible stake.

The result exceeded the published 66.67% approval requirement by roughly one-third of a percentage point. As previously reported, the proposal could remove an estimated 18.9 million SOL from projected issuance over six years, equivalent to about 2.6% of the supply expected under the existing schedule.

Hubbard said inflation of about 4% to 4.5% was “not that extreme” and rejected the view that issuance was the main force holding back SOL’s market performance. In his assessment, calling inflation the problem offers an overly simple explanation for the token’s price movements.

Staking rewards also remain inside the Solana economy, Hubbard noted, because SOL issued to stakers is commonly restaked rather than sold immediately. Based on that structure, he said cutting issuance would not produce an immediate or easily measured change in SOL’s price.

Galaxy Research raised a related concern before the vote, warning that lower staking rewards could make validator operations less attractive if increased fee income or SOL price appreciation failed to offset the lost revenue. The firm also said frequent changes to established economic parameters could make financial planning more difficult for validators and other businesses.

Hubbard’s company has direct exposure to the issue. SOL Strategies operates Solana validators, provides staking services, and manages a SOL treasury. Its earnings can therefore be affected by staking rewards, validator revenue, and changes in the value of SOL.

SGP-0003 vote has opened a dispute over abstentions

Alongside his concerns about inflation, Hubbard questioned how Solana officials interpreted the result of SGP-0003, the Resource and Inclusion Fee proposal.

The official final tally gave SGP-0003 53.9% support, with 18.92% voting against it and 27.18% abstaining. Under the formula displayed in Solana’s current governance documents, abstentions count toward both quorum and the denominator used to calculate approval, leaving the proposal below the required two-thirds level.

Hubbard argued that the calculation method communicated when voting began treated abstentions differently. Under that interpretation, abstentions helped meet quorum but were excluded when calculating the share of decisive votes cast in favor or against.

Excluding abstentions, SGP-0003 secured approximately 74% of the stake that selected either option, enough to exceed the two-thirds requirement. Hubbard therefore considers the proposal approved under the rules participants were originally given, even though he believes rejection may produce a better practical result.

Solana Compass stated before the ballot that SGP-0003 needed 66.67% of the combined “for” and “against” stake and that abstentions would not affect the outcome. An Aug. 9 report on the tokenomics debate also described the calculation as excluding abstentions from decisive stake.

The Solana Constitution currently says the opposite. Article IV states that the approval denominator consists of “For + Against + Abstain,” while the repository’s voting policy repeats that abstaining stake counts as participation without contributing to the “for” tally.

According to Hubbard, applying a different calculation after voting started moved the goalposts for validators and delegators. He said procedural integrity required using the rules presented when the ballot opened, regardless of whether the resulting proposal was good policy.

Resource fees could add costs for Solana applications

SGP-0003 supported a redesign of Solana’s transaction charges through SIMD-0553. Solana currently charges a base fee of 5,000 lamports per signature, with half burned and half paid to the block-producing validator.

Under SIMD-0553, transactions would instead carry a 2,500-lamport inclusion fee paid to the block producer and a separate fee based on the computing resources requested. The protocol would burn the resource-based portion in full.

Using network activity from May 2026, the proposal’s authors estimated that daily SOL burns could rise from about 648 SOL to between 1,500 and 1,800 SOL during the first stage. Later stages could increase the estimated range to between 3,750 and 4,500 SOL and eventually between 7,500 and 9,000 SOL.

Hubbard said the model would introduce unnecessary transaction complexity. Resource-heavy applications, trading routers, and order-book operators could face higher costs because fees would depend on how much computing capacity their transactions request.

SOL Strategies’ CEO also raised concerns about the financial interests of the proposal’s supporters. SIMD-0553 was written by Cavey of Temporal, a research and development company that says it built HumidiFi, one of Solana’s dominant proprietary automated market makers.

Hubbard alleged that the proposed fee structure could benefit the associated propAMM while imposing higher costs on direct competitors. No independent transaction-level study cited in his statement established the size of any competitive advantage, making the conflict claim Hubbard’s assessment rather than a confirmed effect of the proposal.

Before the vote, a simulation hosted by Sandwiched.me examined the expected cost for routers, applications, and propAMMs at different resource-fee rates. The dashboard showed that the effect varied according to transaction design, requested compute limits, and whether applications optimized their resource use.

Solana’s earlier inflation vote also divided validators

Debate over issuance did not begin with SGP-0002. In March 2025, Solana validators considered SIMD-0228, which proposed replacing the fixed inflation schedule with a rate that responded to staking participation.

Under the model, inflation would fall when a large share of SOL was staked and rise when participation dropped enough to create security concerns. The proposal received 61.39% support but failed to clear the required two-thirds threshold.

Ahead of that ballot, earlier coverage reported that Solana’s annual inflation stood near 4.6% and was already set to decline by 15% each year until reaching 1.5%. Critics warned that a sharp reduction could weaken smaller validators by lowering rewards while fixed hardware and voting expenses remained.

Hubbard’s position differs from supporting the existing inflation level permanently. He said neither SGP-0002 nor SGP-0003 was critical to Solana’s future and described the timing and process as more concerning than the long-term policy goals.

For U.S. investors, the proposals also affect exposure held through SOL Strategies shares. The Canadian company trades on Nasdaq under the ticker STKE and on the Canadian Securities Exchange under HODL, giving American shareholders indirect exposure to Solana validator income, staking activity and the company’s SOL holdings.

According to the company, Hubbard became its full-time CEO in 2026 after serving as interim chief executive from October 2025. SOL Strategies’ Nasdaq listing began under STKE in September 2025, replacing its previous OTCQB trading arrangement.

SGP-0002 has provided a governance mandate rather than an automatic change to issuance. SIMD-0550 still requires validator-client implementation, consistent inflation calculations across clients, and activation through a mainnet feature gate at an epoch boundary. Rewards earned before activation would remain unchanged, while the faster disinflation schedule would apply beginning with the following epoch.

New Jersey’s top legal and gaming enforcement officials have asked the US Supreme Court to step into a fast-growing dispute over prediction markets—specifically whether state regulators can enforce gambling rules when a platform argues it is operating under a federal framework.

Attorney General Jennifer Davenport and Mary Jo Flaherty, interim director of the New Jersey Division of Gaming Enforcement, filed a petition for a writ of certiorari on Wednesday, seeking the Supreme Court’s review of New Jersey’s enforcement action against Kalshi. The case centers on whether federal law preempts states from regulating sports bets conducted within their jurisdictions, even when the platform says its markets are registered with the Commodity Futures Trading Commission (CFTC).

Key takeaways

• New Jersey has petitioned the US Supreme Court to decide the scope of federal preemption over state regulation of sports betting on prediction-market platforms.
• The dispute is tied to whether CFTC-registered prediction markets fall under the Commodity Exchange Act and are treated as “swaps,” as argued by Kalshi.
• New Jersey’s filing points to civil actions reportedly brought by gaming regulators in at least 20 states to resolve similar jurisdictional questions.
• New Jersey warns that a Kalshi win could make many sports-betting arrangements illegal if they are offered outside CFTC-registered trading venues.
• Kalshi says it disagrees with the appeal, arguing that prediction markets cannot function under a patchwork of state regulators.

Why New Jersey wants the Supreme Court involved

In its petition, New Jersey argues that the Supreme Court is needed to resolve a jurisdictional conflict that has left prediction market operators and regulators in uncertainty. Davenport said prediction-market companies claim they offer legal sports betting across all 50 states, but that they “refuse to follow the gambling laws of any State.” She framed the dispute as Congress not creating a blanket exemption from state law for sports-betting activities.

New Jersey’s petition asks the justices to address a specific question about the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act: whether that law preempts states from regulating sports bets occurring within their jurisdictions when those bets are offered on markets registered with the CFTC.

The legal battleground: CFTC registration and “swaps”

The Supreme Court request follows an April opinion from the US Court of Appeals for the Third Circuit. According to reporting on that decision, the appellate court ruled 2-1 against New Jersey’s gaming authorities, rejecting Kalshi’s argument that it had a “reasonable chance of success” in asserting that the CFTC’s Commodity Exchange Act preempted state law.

The Third Circuit’s ruling addressed—at least for the purpose of the lower court dispute—whether Kalshi could rely on federal preemption stemming from the CFTC framework. A central part of New Jersey’s appeal is a challenge to the agency-level argument that sports bets issued through prediction-market platforms should be treated as “swaps” within the CFTC’s jurisdiction.

In New Jersey’s characterization, the key point is that federal law does not displace state sports-gambling enforcement—even where the markets are registered with the CFTC. Cointelegraph reported that it reached out to the CFTC for comment on the petition but did not receive an immediate response.

What a Kalshi victory could mean for state enforcement

New Jersey’s filing argues that the stakes extend beyond one company. The Attorney General’s announcement suggests that if Kalshi were to prevail on preemption grounds, federal prohibitions on trading “swaps” outside CFTC-registered markets could be read to make certain sports-betting activities illegal even in states where the activity would otherwise be permitted.

The logic, as presented by New Jersey, is straightforward but consequential: if CFTC preemption is broad enough to block state gambling enforcement, then sports bets structured as “swaps” would be required to comply with federal venue restrictions. That could leave market participants with fewer lawful pathways—depending on how the platform structures its offerings and where and how trading occurs.

Kalshi, however, rejected the approach. In a statement to Cointelegraph, spokesperson Dani Lever said the company disagreed with New Jersey’s decision to seek Supreme Court review, arguing that it cannot be “regulated by 50 different regulators.” Lever added that the company remains confident in the lower courts’ rulings and said nothing in New Jersey’s filing changes its position.

Why this case matters for the broader prediction-market sector

Whether the Supreme Court will take the case is uncertain. Observers have noted that the justices could consider the underlying preemption question in similar prediction-market disputes—whether those involve New Jersey, Nevada, or future enforcement actions against other platforms. But the timing and which specific dispute the court chooses remain open.

That uncertainty is itself part of the problem for the industry. For platforms, the outcome determines whether their compliance strategy is primarily federal—tied to CFTC registration and the Commodity Exchange Act—or whether states can continue to impose their own betting and licensing regimes even when platforms believe their offerings fit within federal categories.

For investors and users, the practical implication is clear: legal risk can vary sharply by jurisdiction, and the structure of a platform’s market and trading mechanics may be treated differently depending on where enforcement occurs. A Supreme Court ruling could reduce that uncertainty—or, depending on how the court rules, potentially increase it by narrowing the range of activities that states may regulate.

As the case heads toward a likely Supreme Court decision or continued appellate litigation, the most important thing to watch is whether the Court grants review and, if so, how it frames the Dodd-Frank preemption question around CFTC “swaps.” Until then, prediction markets remain in a legal gray zone where federal registration arguments and state gambling enforcement can collide in unpredictable ways.

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