Anthropic said on Tuesday that its Claude AI found new weak spots in two encryption systems. Encryption is the math that hides your messages, logins and bank details from strangers.

Nothing you use today is at risk. But the news matters for a different reason. A machine did work that top human experts had missed.

What Is HAWK, and What Broke

HAWK is a digital signature. Think of it as an ID check for websites and messages. It was built to survive future quantum computers. Experts reviewed it for two years and found nothing. Claude found a hidden pattern in HAWK’s math in 60 hours.

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By Anthropic’s own figures, cracking the smallest HAWK key fell from 2^64 steps to 2^38. That is roughly 67 million times less work. The method is in Anthropic’s paper.

The fix is simple but painful. Double the key size. That removes the main reason to pick HAWK.

The AES Result, Explained Simply

AES (Advanced Encryption Standard) scrambles most internet traffic. It has guarded data since 2001.

Anthropic did not break AES. It attacked a weaker version with 7 of the usual 10 scrambling rounds.

Claude invented a shortcut it named the Möbius Bridge. The trick removed one guessing step.

That made the best known attack 200 to 800 times faster.

Claude worked alone for three days. Two humans then spent nearly a month checking its answer.

Why This Matters

Checking the work is now the slow part. Anthropic says humans cannot keep pace with the model.

Code designs have failed late before. In 2022, researchers cracked SIKE, another candidate, in about an hour on a laptop.

Bitcoin (BTC) and Ethereum (ETH) rely on a different system. Experts still argue over when quantum computers break it. These attacks do not touch it.

The clock is running anyway. Google plans to switch by 2029 under its migration timeline. US agencies face a 2031 quantum deadline.

What to Watch Next

NIST (National Institute of Standards and Technology) must now weigh a public attack on a scheme it was still considering. Anthropic hinted at more results it has not released yet. It also plans a workshop with academics in the coming weeks.

Would you trust an AI to test the locks on your own data?

The post Anthropic’s AI Finds Weaknesses in the Technology Protecting Your Data appeared first on BeInCrypto.

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The Commodity Futures Trading Commission headquarters in Washington, Dec. 23, 2022.

Ting Shen | Bloomberg | Getty Images

A coalition of 44 state attorneys general wrote in a letter to the Commodity Futures Trading Commission on Monday that the agency doesn’t have the power to regulate sports-related event contracts on prediction market platforms. 

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The letter was sent as the public comment period for the CFTC’s first proposed rule on prediction market regulation expired Monday evening. The measure primarily focuses on exchanges’ sports offerings.

“The Proposed Rule goes beyond the CFTC’s statutory powers, is in tension with the Constitution, and would otherwise be arbitrary and capricious in its current form,” wrote the coalition of states attorneys general, led by Ohio Attorney General Andy Wilson. “The CFTC should start afresh with its rulemaking and clarify that sports bets and gambling cannot be traded on [designated contract markets], but are instead subject to state law.”

Attorneys general representing Florida, Georgia, New Hampshire, Missouri and Texas did not sign the letter. 

States and the CFTC have been locked in a jurisdictional battle ever since prediction market exchanges’ volumes exploded last year, primarily driven by the popularity of their sports-related contracts. The 2026 FIFA World Cup sent platform volumes to new heights. 

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The CFTC — and prediction market platforms — argue that all event contracts are swaps, a derivative that is regulated by the commission. However, states across the country believe that the sports-related contracts look too much like sports betting, which is in their jurisdictional wheelhouse. 

In June, the commission released a first draft of its proposed rule on regulating prediction markets. The draft focused heavily on the controversial sports-related event contracts, including describing which ones may end up prohibited. 

It also crafted a definition for “gaming,” which the commission in the rule said is something done for recreation or to entertain, is governed by rules and is based on measurable outcomes determined by skilled activity during the activity. In its own letter to the CFTC, derivatives marketplace CME Group disagreed with this definition.

“By defining ‘gaming’ as the sport itself rather than the financial wagering on the sport, the CFTC’s definition suggests the [Commodity Exchange Act] is preempting state sports regulations, which is a striking overreach,” wrote CME general counsel Jonathan Marcus in the letter. 

The CFTC has used federal preemption as an argument in court proceedings across the U.S. against states to defend what it sees as its exclusive jurisdiction to regulate prediction markets. The commission is in litigation with nine states across the country to defend that belief. 

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While the CME is concerned about the federal government regulating sports-related event contracts, the exchange acts as sportsbook FanDuel’s CFTC-regulated exchange for its sports prediction markets. 

Meanwhile, prediction market platform Rothera — which launched in June — argued that the commission should adopt the “gaming” definition precisely because it makes it about the activity itself. 

“A definition keyed to wagering, or to ‘risking something of value’ would, as the Commission recognizes, sweep in every event contract,” Rothera CEO Thomas Chippas wrote in a letter to the commission. “Rothera agrees that a definition keyed to ‘wagering’ should be rejected.”

Observers of prediction markets widely agree the Supreme Court will likely have the final say in who gets to regulate sports-related event contracts. Until then, a flurry of other court decisions are deciding the status of prediction markets’ offerings.

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Those decisions are often yielding diverging results. A Michigan judge in late June blocked platform Kalshi from offering sports bets in the state, while a federal judge in Minnesota on Monday temporarily blocked a statewide ban on prediction markets from taking effect Saturday. 

Disclosure: CNBC and Kalshi have a commercial relationship that includes customer acquisition and a minority investment.

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Robinhood stock extended its decline on July 28 as investors weighed regulatory uncertainty, weaker trading activity and the company’s upcoming second-quarter earnings.

Summary

• HOOD fell 3.68% to $92.13, extending its decline from the July peak near $120.
• Analysts expect Robinhood to report $1.24 billion to $1.28 billion in second-quarter revenue.
• The stock has fallen below its 50-day moving average and $95 Fibonacci support.
• $89.13 is the next support level, while earnings could determine HOOD’s short-term direction.

Robinhood stock extends its July decline

Robinhood Markets (HOOD) traded around $92.13 on July 28, down 3.68% during the session. The stock opened at $92.67, reached an intraday high of $93.87, and fell as low as $88.21 before recovering part of the loss.

The latest decline left HOOD about 23% below its July peak near $120. Shares had rallied sharply from approximately $70 in late April before reversing course during the second half of July.

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Uncertainty surrounding US crypto legislation has added pressure across crypto-linked stocks. The pullback also comes before Robinhood reports its second-quarter results after the market closes on July 29.

Investor attention will center on whether crypto, equity, and options trading activity remained strong enough to support transaction-based revenue. Trading volumes weakened during the bearish market conditions seen between April and June, potentially limiting growth in Robinhood’s core brokerage operations.

Robinhood Chain has also failed to translate into immediate stock gains. HOOD traded near $100 when the blockchain was unveiled on July 1 but has since fallen below $93.

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Robinhood earnings could show 24% revenue growth

Wall Street analysts expect Robinhood to report between $1.24 billion and $1.28 billion in second-quarter revenue. Reaching the lower end of that range would represent growth of roughly 25% from the $989 million reported for the same quarter in 2025.

The results will follow a weaker-than-expected first quarter. Robinhood reported $1.07 billion in revenue for the period, below analysts’ estimate of $1.14 billion. Earnings per share reached $0.38, also missing the expected $0.40.

That earlier miss triggered an over 10% decline in HOOD stock. A similar reaction remains possible if second-quarter revenue falls below Wall Street forecasts, particularly now that the share price is approaching several technical support levels.

Prediction markets could offset some weakness in conventional trading volumes. Bernstein estimates that the business could generate $586 million in revenue for Robinhood during 2026. The firm has set a $160 target for HOOD, although achieving that valuation would depend on continued growth and regulatory conditions.

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Robinhood will report alongside Microsoft and Meta, making July 29 an important earnings session for US technology stocks. Guidance for the rest of 2026 may be as important as the reported revenue figure because it could reveal whether recent market weakness has affected customer activity.

HOOD price breaks below the 50-day average

The daily chart shows that Robinhood stock has fallen below the 50% Fibonacci retracement level at $95.03. HOOD has also slipped under its 50-day simple moving average at $95.93, indicating that short-term momentum has turned bearish.

Price action has broken below an ascending trendline drawn from the late-April low. That breakdown weakens the uptrend that carried HOOD from approximately $70 to its July high near $120.

The daily relative strength index has dropped to 40.33, below its signal average of 52.46. A reading below 50 points to fading momentum, but HOOD has not yet reached the conventional oversold threshold of 30.

The chart supports the broader rounded-top risk identified after the stock repeatedly failed to hold its July gains. However, the pattern does not guarantee a fall toward the earlier $74 level. HOOD must first break through several intermediate support zones.

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$89 and $86 are the next HOOD support levels

Immediate support sits at the 38.2% Fibonacci retracement level of $89.13. HOOD briefly fell below that price during the July 28 session but recovered above $92, showing that buyers remain active near $89.

A daily close below $89.13 could expose the 100-day moving average at $86.24. Below that level, the next major Fibonacci support stands at $81.83, corresponding to the 23.6% retracement of the April-to-July rally.

The bearish target near $74 would become more credible only if the stock loses both $86 and $81.83. That scenario would erase most of the gains recorded since late May.

On the upside, HOOD must first reclaim the $95.03-to-$95.93 range. A move above that zone would place the psychological $100 level and the 200-day moving average at $100.13 back in focus.

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Further resistance sits at $109.33, followed by the July high around $120.03. An earnings beat paired with strong guidance could support a recovery, while another miss may increase pressure on the lower support levels.

Robinhood Chain growth contrasts with HOOD weakness

Token Terminal data shows that Robinhood Chain has become the largest blockchain by the number of tokenized-stock holders. The milestone comes less than a month after Robinhood unveiled the network.

Robinhood Chain became the largest blockchain by the number of stock token holders within a month of launch.

That didn’t happen overnight.

Robinhood has spent more than a decade building a retail platform that it can now extend onchain. pic.twitter.com/NWZKZw3dvb

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— Token Terminal 📊 (@tokenterminal) July 27, 2026

DeFiLlama data places the chain’s total value locked at $334 million, making it the 15th-largest blockchain by that measure. That adoption has not prevented HOOD from falling since the network’s launch.

For US investors, the July 29 results may help separate Robinhood’s operating performance from broader concerns surrounding crypto regulation. Revenue growth, prediction-market activity and management’s outlook will determine whether the company’s expanding blockchain business can support its valuation.

Until then, $89 remains the key downside level, while a recovery above $96 would be the first sign that selling pressure is easing.

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Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

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Michael Saylor said on Tuesday that Bitcoin has won, and that its gravest danger now comes from within its own ranks. His company, Strategy, has not bought a single BTC in five consecutive weeks.

Blockchain intelligence firm Arkham dissected the pause. Strategy (formerly MicroStrategy) has built a $3.75 billion cash reserve instead. Two clocks are now running at once, and they point in opposite directions.

Why Michael Saylor Is Warning About Bitcoin Now

The timing is not accidental. BIP-110 is a proposed one-year soft fork that would cap the size of arbitrary data fields in Bitcoin transactions. Written by developer Dathon Ohm and shipped in Bitcoin Knots, it began miner signaling on December 1, 2025.

Miners have largely ignored it. That does not stop it.

The proposal’s own deployment schedule sets a mandatory lock-in window for around August 2026. Once that window opens, blocks that fail to signal are rejected as invalid. Lock-in becomes guaranteed. Activation follows two weeks later, and the rules expire on their own about a year after that.

In other words, Saylor is not arguing against something that needs to win a vote. He is arguing against something with a calendar. That window is days away.

What Saylor Actually Said About Consensus Rules

The Strategy executive chairman framed Bitcoin’s consensus rules as a constitution. They define property, scarcity, settlement, and power. Rewriting them to suit any faction, he argued, attacks every participant alive today and every one who comes later.

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He named three targets:

• BIP-110 censors valid fee-paying transactions in his reading.
• Covenants create fresh attack surface.
• Larger blocks thin out blockspace scarcity and raise validation costs.

His central technical claim concerns miner revenue. Block subsidies halve every 210,000 blocks. Fees must therefore carry more of the security budget over time. Weakening the fee market, he said, disarms the network.

The other side of this argument is well staffed. BIP-110’s backers say arbitrary data embedding burdens node operators and crowds out payments.

Saylor is not the only critic, and critics do not agree with each other. Blockstream chief executive Adam Back also opposes the proposal. His fork risk warning targeted the lowered 55% activation threshold, not censorship.

Saylor’s earlier BIP-110 warning called the proposal Bitcoin’s biggest self-inflicted risk. The dispute has split Bitcoin developers for months.

Why Did Strategy Stop Buying Bitcoin?

Because equity became cheaper to sell than conviction was to abandon.

A Form 8-K filing dated July 27 confirmed a $525 million addition to the dollar reserve. The total reached $3.75 billion, which the company frames as 2.1 years of dividend coverage against roughly $1.76 billion in annual preferred obligations.

The money came from shares, not coins. Strategy sold $544.5 million of MSTR stock last week. Roughly $467 million and $263.5 million came from share sales in the two weeks before that, or about $1.26 billion across three weeks.

It sold those shares cheap. MSTR trades near $96.66, down about 76% from its 52-week high of $414.36. Every dollar raised this way costs far more equity than it would have a year ago.

How Far Behind Is the 1 Million BTC Target?

Strategy has said it wants 1 million BTC by the end of 2026. It holds 843,775. The gap is 156,225 BTC.

About 22 weeks remain in the year. Closing the gap would require roughly 7,000 BTC per week, or near $447 million weekly at current prices. The company is buying none.

Why It Matters for BTC and MSTR Holders

Strategy’s average cost sits near $75,494 per coin. Bitcoin trades around $63,817, down roughly 1.5% over 24 hours and about 49% below its October 2025 peak of $126,080. That leaves the stack close to $9.9 billion underwater on paper.

BTC would need to climb about 18% to return the position to break-even. The Bitcoin price today gives that no help.

The preferred shares explain the urgency. STRC trades near $88.86, still about 11% below its $100 par despite a dividend raised to 12% on July 1 and an authorized buyback programme.

That pressure on STRC shaped the Digital Credit Capital Framework announced on June 29, which cleared buybacks and up to $1.25 billion of Bitcoin sales.

What to Watch Over the Next 30 Days

Three dated events sit inside the window.

• BIP-110’s mandatory signaling window is expected to open in August, which would guarantee lock-in regardless of miner support.
• Strategy files weekly. A sixth consecutive week without a purchase would extend the longest pause of its accumulation era.
• With $3.75 billion banked, the company has removed the near-term need to touch its $1.25 billion Bitcoin monetization authorization.

Both positions can hold at once. One defends a protocol meant to last a century. The other has to fund a dividend next quarter. The tension is not hypocrisy so much as a scheduling problem, and the schedule is about to get crowded.

The post Michael Saylor Says Bitcoin Has Won, So Why Did MicroStrategy Stop Buying BTC? appeared first on BeInCrypto.

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The xyz.SKHYNIX perpetual on Hyperliquid crashed around 20% almost instantly late on Monday night, dropping from $1,131 to as low as $900, completely decoupling from pricing elsewhere on crypto exchanges.

On-chain data indicates that the entire cascade stems from a single share trade placed from Seoul.

How One Bad Price Caused a Liquidation Cascade

It appears that during the pre-market window before trading opened on the South Korean Nextrade exchange, there was an order to sell stock for major chip manufacturer SK Hynix placed 30% below the previous closing price. This order may have been placed by accident.

With thin pre-market liquidity, there were no competing orders on Nextrade at that moment, and that single trade briefly set the price of the stock on that exchange.

The price corrected back to market value within two minutes, but by that time, the XYZ oracle responsible for setting the price for this stock on Hyperliquid had already consumed and relayed the information.

Just four seconds after Nextrade opened for trading, the SKHYNIX oracle price plummeted 15.6%, and liquidations began about 2 seconds later.

Freefall: The Final Figures

On Hyperliquid, users were betting on the price of the semiconductor stock using leverage. X.com user MarketAlpha calculated that 960 accounts lost $57 million in a liquidation cascade as a result of this oracle error, with $17.3 million in realized losses.

Today, a single share sale triggered millions of dollars in liquidations on Hyperliquid.

At 11:00 pm UTC on July 27, $SKHYNIX suffered a flash crash on Hyperliquid, falling roughly 20% within seconds before rapidly recovering.

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The entire cascade began with a single share sold… pic.twitter.com/quFIo2o1Lc

— Markets Alpha (@MarketsAlpha) July 28, 2026

The backstop then triggered auto-deleveraging against profitable short positions, with $10.8 million in gains realized across 100 accounts. The largest gains and losses for individual accounts were $2.55 million and $2.05 million, respectively. Surprisingly, the flash crash mimicked a real stock price correction of around 15%, which took place hours later on the open market.

Hyperliquid staff have pointed out that the exchange is permissionless and that SKHYNIX is deployed and operated by XYZ, which is reportedly investigating the issue but has not released a statement.

The post One Bad Price, 960 Liquidations: Inside SK Hynix Flash Crash on Hyperliquid appeared first on CryptoPotato.

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Arthur Hayes added 3,298 ETH worth $6.39 million on July 28, roughly three hours before Ethereum’s spot price slid from $1,960 to $1,872, a drop that immediately raised the question of whether the BitMEX co-founder’s whale trading triggered the selloff. The answer, grounded in the on-chain data, is no.

But the timing crystallizes a more interesting question about where Hayes is positioning for the next leg of this ETH cycle.

According to Lookonchain, the July 28 purchase was Hayes’s largest single leg in a buying streak that began on July 15. He has now accumulated 7,213 ETH at a total cost of $13.87 million, averaging $1,923 per ETH.

At post-drop prices, the position sits roughly $368,000 underwater – a paper loss, not a crisis, but one that underscores how quickly the macro environment can move against even a well-telegraphed accumulation thesis.

Discover: The Best Crypto to Diversify Your Portfolio

How Hayes Built the Position – and Why OTC Routing Matters

Hayes assembled the 7,213 ETH stack through a series of over-the-counter trades routed through Galaxy Digital, FalconX, and Cumberland. Individual legs ranged from approximately 645 ETH to 1,330 ETH, with the July 28 purchase at 3,298 ETH representing the largest single tranche.

OTC execution is the key structural detail: none of these trades hit the open order book in a way that would create visible sell pressure or liquidate stacked bids.

On-chain data flagged by Lookonchain confirmed the wallet-to-OTC-desk transfer pattern. The mechanics mean the correlation between Hayes’s buy and the subsequent ETH price drop is coincidental timing, not causation.

A $6.39 million OTC purchase, however attention-grabbing in dollar terms, is small relative to daily ETH spot and derivatives volume across centralized and decentralized venues.

This accumulation reverses a June exit that cost Hayes approximately $606,000 in realized losses. He had sold roughly 6,000 ETH below $1,700, citing macro headwinds, including energy prices and political risk.

He then re-entered starting July 15 as ETH recovered above $1,750, a pattern that fits his documented trading style, which prioritizes rebuilding conviction positions at dislocated prices rather than protecting short-term P&L.

The Actual Catalyst: Fed Timing and Broader Crypto Market Pullback

The ETH price drop on July 28 was not an isolated event. It was part of a broader crypto market pullback across the asset class as traders de-risked ahead of the Federal Reserve’s two-day policy meeting.

Rate decisions, or more precisely, the forward guidance language that accompanies them, have been the dominant macro variable for risk assets in 2026. Crypto markets have priced in sensitivity to that signal, and positioning ahead of the announcement typically compresses speculative longs.

ETH is not uniquely exposed here, but it is exposed. The move from $1,960 to $1,872 represents a roughly 4.5% intraday drawdown that hit simultaneously with pullbacks in BTC and major altcoins.

Attributing that to a single 3,298 ETH OTC purchase, one that didn’t touch the open market, requires ignoring how macro-driven de-risking actually propagates through derivatives books and spot liquidations.

$1,900 Is the Level That Decides the Near-Term Narrative

Hayes’s average entry of $1,923 is not far above ETH’s post-drop price. The $1,900 level is the immediate technical line of significance: a sustained hold above it would keep Hayes’s position near breakeven and preserve the bullish structure that drew him back in after the June exit.

A failure to reclaim $1,900 with any conviction opens the door to a retest of the $1,750–$1,800 range where his July re-accumulation began.

The institutional thesis underpinning Hayes’s position has not been altered by a single macro-driven pullback. Fundstrat’s Tom Lee has made a parallel argument: institutions are moving past simply trading Ethereum toward building on it, with BlackRock’s tokenized fund and Robinhood’s ETH-based fee token cited as structural demand drivers.

That thesis is a medium-term one, and it does not immunize any position against near-term rate-driven volatility.

On-chain data confirms that Hayes’s Maelstrom-linked wallet is still holding, with no exit signals flagged in the reporting window. That matters because his track record includes rapid reversals – he has publicly championed tokens including HYPE, Zcash, and Worldcoin before quietly closing those positions as sentiment shifted.

The ETH position is larger in both size and stated conviction than those prior trades, but the pattern is worth tracking. On-chain watchers will be monitoring for any OTC transfer flows in the opposite direction as the Fed decision lands.

For active ETH traders, the Hayes accumulation is a data point, not a trade signal. The more actionable read is the Fed meeting outcome and whether ETH can reclaim $1,900 in the sessions immediately following. A contrarian institutional position of this size at current levels suggests smart money sees value here; it does not guarantee the market agrees on any particular timeline.

Trade Ripple XRP on Bybit and Get a Chance to Win Our $1,000 USDT Airdrop

The post Arthur Hayes Holds 7,213 ETH as FOMC Jitters Drives Ethereum Price Drop appeared first on Cryptonews.

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After several months of underperforming, the self-proclaimed Dogecoin killer finally posted a decisive rebound over the weekend. However, the pump was short-lived as the bears quickly intercepted the move and dragged the price down.

The enthusiasm faded, while a well-known analytics platform outlined when the next buying opportunity might emerge.

Retail Attention Arrived Late

Just a few days ago, Shiba Inu recorded a sudden 35% price jump to reach a two-month high of around $0.00000582 (per CoinGecko). Some potential factors that may have acted as catalysts for the significant revival include a whale that has resumed accumulating after more than half a year of inactivity, as well as the notable resurgence of the burning mechanism.

The bulls, though, lost momentum, and SHIB currently trades at roughly $0.000004631, representing a nearly 20% decline from the local high. The analytics platform Santiment noted that amid the rally, there were 52 whale transactions in a single day, the most since March 31.

“Activity strongly suggests larger holders took profits into strength,” it added.

On the other hand, retail investors joined the party too late and chased the excitement near the top, “giving whales the liquidity needed to reduce their exposure.”

According to the entity, the smart approach with meme coins is to cash out when retail FOMO spikes, and re-enter once the crowd turns hostile and calls the token a scam.

It seems like X user Crypto King had followed these rules. On July 26, the trader noted the double-digit price increase, the whales’ accumulation, the exploding burn rate, and rising volume to open a short position.

“These euphoric pumps have a habit of trapping late buyers… but the market loves proving people wrong,” they said.

What Comes Next?

As mentioned above, SHIB lost its traction, while the broader cryptocurrency market flashed in red again, which could lead to a further downfall for the meme coin in the near term.

The rising amount of tokens stored on exchanges serves as another warning. CryptoQuant’s data shows that the figure has been constantly rising over the past several days, reaching a two-week high of around 86.7 trillion units. Such a development suggests that many investors have abandoned self-custody and flocked to centralized platforms, thus increasing immediate selling pressure.

The stalled activity on Shibarium is also worth mentioning. The layer-2 scaling solution, designed to foster the advancement of Shiba Inu’s ecosystem, was once considered among the primary catalysts that could trigger a price increase for the meme coin. However, after an exploit in September last year, the protocol saw a sharp decline in usage, dropping to merely hundreds or thousands of daily transactions.

The post Shiba Inu (SHIB) Drops 20% From Its Recent High: Is It Time to Buy? appeared first on CryptoPotato.

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A federal judge has temporarily blocked Minnesota from enforcing a first-of-its-kind law that would have prohibited prediction markets in the state.

The latest decision hands a temporary legal victory to Kalshi, Polymarket, and the US Commodity Futures Trading Commission (CFTC).

Early Court Victory

According to Reuters, US District Judge Katherine Menendez granted a preliminary injunction after finding that the state law, which was due to take effect on Saturday, is likely preempted by the federal Commodity Exchange Act. The ruling allows Kalshi and Polymarket to continue offering event contracts to users in Minnesota while the lawsuit proceeds.

The dispute began after Governor Tim Walz signed legislation in May that made it a criminal offense to operate, host, or promote prediction markets in the state. Unlike other states that have challenged companies such as Kalshi by arguing they were operating unlicensed gambling businesses under existing gaming laws, Minnesota enacted a law that aimed specifically at prediction markets.

Judge Menendez said several event contracts offered by Kalshi and Polymarket likely qualify as “swaps” under federal law. Because the CFTC regulates swaps, she found that federal law is likely to override Minnesota’s ban on prediction markets. Despite this, she noted that the court could narrow the injunction later if it determines that not every event contract listed on the platforms falls within that definition.

For now, however, she said preserving the status quo is appropriate while the court fully considers the merits of the case.

The decision was welcomed by both platforms. A spokesperson for Kalshi, Elisabeth Diana, for one, said the ruling confirms that states cannot prohibit activities outside their jurisdiction. Meanwhile, Minnesota Attorney General Keith Ellison said the state disagrees with the decision and will continue defending the law while arguing,

“Prediction markets are gambling, plain and simple, and Minnesota has every right to keep predatory gambling out of our communities.”

Compliance and Legal Battles

The latest ruling comes as Kalshi continues to face legal restrictions in Massachusetts, Michigan, Nevada and Washington. Earlier this year, the company also stepped up enforcement of its own trading rules.

In April, it suspended three US political candidates after finding they had traded on contracts tied to elections in which they were running. The platform described the activity as political insider trading and said it violated its CFTC-approved rules. Minnesota State Senator Matt Klein and Texas candidate Ezekiel Enriquez each placed trades worth less than $100 on their own races and accepted fines and five-year suspensions.

Virginia candidate Mark Moran received a larger fine and a five-year ban after making multiple trades and refusing to settle. Moran said he placed the bets to test Kalshi’s enforcement process.

A month later, federal prosecutors charged Google software engineer Michele Spagnuolo, known online as “AlphaRaccoon,” with allegedly using confidential Google search data to make about $1.2 million by trading on Polymarket. Authorities said he accessed nonpublic “Year in Search 2025” rankings before they were released and placed bets on a related prediction market.

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