Michigan’s attorney general says a state court has issued a preliminary injunction against Kalshi, preventing the prediction markets platform from offering event contracts to residents. The order, announced by Attorney General Dana Nessel this week, is framed by officials as an effort to curb what they describe as unlicensed “sports betting” conducted under an investment-like presentation.

According to Nessel’s office, the Circuit Court for the 30th Judicial Circuit in Ingham County granted the state order blocking Kalshi from providing event contracts to Michigan residents. The notice also states that Kalshi could face fines of up to $500,000 per day if the court’s directive is violated.

Key takeaways

• Michigan obtained a preliminary injunction limiting Kalshi’s ability to offer event contracts to state residents.
• Officials argue the activity amounts to sports gambling presented as an investment opportunity, which they say remains unlicensed under Michigan law.
• The injunction follows an earlier Michigan restraining order in June that Kalshi said placed it in conflict with a CFTC directive.
• New Jersey simultaneously moved the dispute toward the US Supreme Court, raising the possibility of a higher-court resolution of regulatory jurisdiction.
• Lawmakers have also proposed legislation targeting prediction market contracts that resemble sports betting or casino-style games.

Michigan targets Kalshi’s event contracts

In a Wednesday notice, Attorney General Dana Nessel said the state court’s order halts Kalshi from offering event contracts to Michigan residents. Nessel linked the action to her ongoing lawsuit filed earlier this year, alleging Kalshi violated Michigan law governing sports gambling.

In her statement, Nessel said Kalshi had attempted to operate in a way that mischaracterized its activities, and she presented the injunction as further protection for residents against what she described as “predatory, unlicensed practices.”

The court’s filing, as summarized in the attorney general’s notice, includes the potential for significant daily penalties for violations, which underscores that Michigan is treating the case as more than a procedural dispute.

How this fits into the broader prediction market legal fight

Michigan’s latest order adds to a series of legal battles in the US involving prediction market platforms such as Kalshi and Polymarket. In many of these cases, state regulators argue the products function like regulated gambling—particularly sports wagering—while the companies and other opponents often argue prediction markets fall under federal oversight frameworks.

Nessel filed the Michigan lawsuit against Kalshi in March, asserting that the platform’s event contracts run afoul of state sports gambling rules. The new preliminary injunction is the most recent step in that enforcement effort.

Notably, the Michigan court’s action follows a June restraining order that barred Kalshi from offering sports betting to Michigan residents. That earlier development triggered a direct conflict between state and federal regulators: the US Commodity Futures Trading Commission (CFTC) ordered Kalshi not to comply with the state order and to keep operating.

Kalshi characterized the CFTC’s response as creating an “impossible position,” according to earlier reporting, highlighting the practical problem that emerges when state courts and federal agencies issue competing instructions.

Cointelegraph reached out to Kalshi for comment but did not receive an immediate response.

New Jersey pushes for Supreme Court review

While Michigan moved forward with its preliminary injunction, New Jersey officials announced the same day that they filed a petition seeking a writ of certiorari from the US Supreme Court. The petition centers on the state’s case against Kalshi and the question of whether federal regulators (through the CFTC) or state authorities have jurisdiction over prediction market offerings.

If the Supreme Court agrees to hear the matter, the ruling could help resolve competing legal theories that have emerged across different states—particularly the extent to which event contracts are treated as subject to federal regulation versus state gambling rules.

Melinda Roth, a visiting professor of practice at New England Law in Boston, told Cointelegraph she could see the Supreme Court taking the case, though she suggested the justices might also wait to address issues on the merits rather than procedural questions like whether a preliminary injunction should be granted. Roth also argued that the Supreme Court may act sooner rather than later given the ongoing litigation in the area.

“If and when SCOTUS takes it up, then this will likely decide whether sports event contracts are federally regulated by the CFTC or the states have the right to ban and/or regulate them as they see appropriate. I say ‘likely’ because Congress might actually act too. They could act before a SCOTUS review, or even after too.”

Legislative proposals aim to separate prediction markets from sports betting

In addition to court-driven outcomes, some US lawmakers are attempting to address the underlying policy dispute through legislation. Earlier coverage noted proposals aimed at limiting the use of insider information in event contracts.

In March, Senators Adam Schiff and John Curtis introduced a bipartisan bill that, as described in reporting, would prohibit CFTC-registered platforms from listing any event contract that “resembles a sports bet or casino-style game,” shifting the authority for regulation to individual states.

The same tension that shows up in Michigan and New Jersey—federal versus state control—appears in these legislative efforts. If enacted, such measures could reduce uncertainty by drawing clearer lines about which prediction market products are treated as sports wagering versus other forms of event-based trading.

At the moment, however, the fate of the sector remains tied to how courts reconcile these jurisdictional questions, and how lawmakers choose to intervene.

For market participants, the immediate watchpoints are straightforward: whether Kalshi appeals or seeks further relief in Michigan, how New Jersey’s Supreme Court petition progresses, and whether Congress advances reforms that could change the regulatory map before the courts fully resolve the issue. Until then, overlapping state enforcement and federal oversight continue to create the kind of uncertainty that can quickly reshape access to event contracts.

Justin Sun’s reputation in China has been taking a serious hit on a daily basis for almost a week, with his latest reply to his haters bordering on near-insanity.

In his most recent diatribe, Sun offered to get his height measured on a livestream so people would stop calling him short and got into an irrational argument about the definition of the word “decency.”

But, first, if you haven’t been following the Chinese drama with capitalistic characteristics, it’s worth getting caught up.

Sun’s first huge mistake

About a week ago, Sun posted a lengthy and very strange story to X, claiming that it was both a work of fiction and as close to the truth as he could recall.

The tale told by Sun involved the Chinese actress Jing Tian and claimed that she was going to donate her eggs to a surrogate so that she and Sun could have a baby.

Sun alleges that when she demanded more money to go ahead, he refused and filed a lawsuit to clawback the gifts he’d given to her thus far.

Iranian uprising

An effective altruism-linked organization, as of last month, is paying $2,000 in weekly compensation for an ostensibly grassroots anti-AI media campaign. 

Irreplaceable, which employs a campaign strategist who also works for the effective altruism-funded Center for AI Safety, supports protests against AI as a way to advocate for regulations that could benefit the effective altruism agenda.

“What’s missing is coordinated action that forces the government to respond,” it claimed.

It’s currently recruiting student protest leaders for an anti-AI uprising in October. They’ll help to coordinate walkouts at more than 100 colleges to demand new regulations to affect the AI industry.

But if the writing sometimes comes off as winking and belabored, the acting is not. Malkovich and Rockwell are a joy to watch, and that, after all, is what we continue to go to the movies for: to see actors at play, even as they work. Malkovich’s Chris and Rockwell’s Lee are an odd-couple duo who have been working together long enough to intuit one another’s thoughts and moods. They also bicker, a lot. Lee seems annoyed by his elder partner’s tendency to tootle down trails of fanciful thought. In an early scene, Chris complains that his apartment in Santiago is riddled with moths, and he doesn’t want them to ruin his clothes. But he also doesn’t want to kill them. Instead, he says, “I’ve been escorting them outside.” It’s 1973, not long before socialist president Salvador Allende will be overthrown in a military coup—Chris and Lee know that’s going to happen, given that their job is to destabilize democratic governments here and there around the world. In one of his many pensive moments, Chris muses, “Sometimes I think I care about the moths in Chile more than I care about the people in Chile.”

Binance has denied that a system or pricing failure caused more than $5 million in alleged trader losses as the AKEUSDT perpetual contract surged from about $0.0076 to nearly $0.045 on Sept. 3.

Binance says AKE liquidations followed market volatility

X user xunlu alleged that more than 30 funding-rate arbitrage positions on Binance were liquidated within minutes at around 5:44 a.m. UTC+8 on Sept. 3.

The trader estimated the losses at more than 5 million USDT and alleged that the sudden move resulted from coordinated activity in the AKE market rather than ordinary trading.

Responding to the complaint, Binance Customer Support said AKE recorded large price swings across several exchanges and on-chain markets during the same period. The exchange attributed the liquidations to market conditions and rejected the claim that a technical problem on its platform caused the losses.

Binance also said an internal review found no fault in its pricing model, risk controls or liquidation engine. According to the exchange, its systems remained operational while the contract moved sharply, leaving leveraged positions exposed to an adverse price change.

The distinction matters because a liquidation can occur even when an exchange has not experienced an outage. Once the value of a trader’s collateral falls below the maintenance margin required for a position, the platform can close the trade automatically to prevent the account from building a larger deficit.

An August guide to margin calls published by crypto.news explained that automated crypto liquidations can move from a warning to forced closure within minutes. Unlike traditional markets, crypto derivatives trade around the clock, leaving traders with little time to add collateral during a fast price move.

AKEUSDT mark price relies on external spot markets

Binance does not offer AKE through its spot market, meaning the AKEUSDT perpetual contract cannot use an AKE price formed on Binance’s own spot order book. The exchange said it instead calculates the contract’s mark price from data gathered across several external spot venues.

A multi-market index is designed to reduce the effect of an abnormal print or short-lived price gap on a single exchange. Binance maintained that the index and mark-price process functioned as intended during the Sept. 3 volatility.

Perpetual futures do not represent ownership of the underlying token. Traders post collateral and take long or short exposure to a contract whose value tracks the asset, while recurring funding payments help keep the contract close to spot prices.

As a perpetual futures explainer noted in June, the mark price, rather than the last traded contract price, commonly determines when a leveraged position is liquidated. Exchanges generally calculate that mark from an index and a funding-related adjustment to limit liquidations caused by brief movements in the futures order book.

For AKEUSDT, the absence of a Binance spot pair makes the composition and behavior of the external index central to the disagreement. The trader has asked Binance to disclose the relevant trading records, liquidation data, and risk-control logs so the calculation can be examined.

Publicly available aggregated spot charts showed heavy volatility during the session. However, the highest combined spot reading was below the contract peak cited by the trader. The report said the gap could have resulted from price differences between the futures contract, external spot venues, or the index used to produce the mark price, but it did not establish which factor accounted for the difference.

Trader alleges AKE short squeeze hit arbitrage positions

The complainant described the affected trades as funding-rate arbitrage positions, a strategy that usually seeks to earn payments created by differences in perpetual-market positioning rather than profit from a token’s direction.

Funding-rate arbitrage commonly combines offsetting positions to reduce directional exposure. One version pairs a spot purchase with a short perpetual contract, allowing the trader to collect funding when short holders receive payments from longs. Other structures may spread positions across several exchanges or contracts.

Although such trades are often called market-neutral, they still carry execution, liquidity, collateral and exchange risks. A cash-and-carry guide published in August noted that an arbitrage position can face a margin call when its leveraged leg moves sharply, even if the combined trade is intended to limit exposure to price direction.

AKE’s reported rise from about $0.0076 to nearly $0.045 would amount to an increase of roughly 492%, or almost six times the starting price. A move of that size can rapidly reduce the margin supporting short futures positions, particularly when liquidity is thin and several trades share the same exposure.

The trader characterized the episode as a short squeeze, in which rising prices force short sellers to close their positions by buying back contracts. Such forced purchases can add to upward pressure and trigger further liquidations when nearby short positions breach their maintenance requirements.

During an unrelated market event in August, a $3 billion squeeze liquidated about $2.77 billion in short positions across major exchanges. Binance accounted for approximately $518 million of the total, while forced purchases pushed prices higher and activated more liquidations. The figures show how automated closures can accelerate an existing move, though they do not establish whether manipulation occurred in AKE.

Binance has attributed the Sept. 3 liquidations to the risks attached to leveraged trading and has not accepted the trader’s claim of coordinated market manipulation. No market regulator or independent investigator has publicly reached a finding on the allegation.

U.S. traders face a different perpetual futures market

For U.S. readers, the AKE dispute concerns an offshore Binance product that is not offered through Binance.US. American access to crypto derivatives remains subject to Commodity Futures Trading Commission rules, while offshore perpetual contracts have historically offered assets and leverage levels unavailable on regulated U.S. platforms.

Regulated perpetual futures began entering the U.S. market in 2026. The CFTC approved a Bitcoin perpetual contract from Kalshi in May, followed by contracts tied to other digital assets, while Coinbase secured another regulated path for domestic perpetual products.

U.S. platforms operate under different product approvals, leverage limits, and market-surveillance requirements. CME Group has challenged the CFTC’s treatment of perpetual futures, arguing that the products should fall under swap rules in the Dodd-Frank Act rather than be regulated as standard futures contracts.

In his complaint, the AKE trader also referred to an earlier TUT liquidation incident and said competing exchanges compensated some affected users. Binance has not agreed that the two events are comparable, maintaining that the AKE positions were closed because of market risk rather than an exchange pricing mistake.

Binance had acknowledged the complaint but had not announced compensation. The trader has requested the full transaction history, liquidation records, and risk-control logs related to the Sept. 3 session.