The U.S. commodities regulator has moved to prevent Kalshi, a registered prediction market platform, from reversing Michigan trades—sparking fresh legal friction between federal oversight and a state court order. The dispute centers on whether Kalshi must unwind already executed sports betting contracts for Michigan users while litigation over Michigan’s sports betting laws continues.

On Tuesday, the Commodity Futures Trading Commission (CFTC) ordered Kalshi not to comply with the Michigan order and instead continue operating. The clash follows an earlier ruling on June 29 by Ingham County Circuit Court Judge Rosemarie Aquilina, who directed Kalshi to stop offering sports betting contracts to Michigan users during the ongoing case.

Key takeaways

• The CFTC says canceling already executed prediction market trades would disrupt market certainty and create a cascading effect across derivatives markets.
• Kalshi argues the situation forces it to choose between conflicting obligations: comply with a state court directive or follow federal regulatory requirements.
• The controversy underscores an ongoing jurisdictional tension between the CFTC and multiple state regulators regarding prediction markets.
• CFTC Chair Michael Selig warned that the agency will continue legal action against states that attempt to impose penalties on CFTC-registered exchanges.

Michigan judge’s order vs. federal directive

Michigan’s court case began with a directive that targeted Kalshi’s ability to provide sports betting contracts to residents of the state. According to Cointelegraph reporting, Judge Aquilina ordered Kalshi to cease offering those contracts to Michigan users while the lawsuit proceeds over whether Kalshi’s offerings violate state sports betting laws. Earlier coverage from Cointelegraph described the scope of that order and the legal context surrounding it.

But on Tuesday, the CFTC intervened. In a press statement, the regulator ordered Kalshi not to comply with the Michigan directive and to continue operating despite the state order. The CFTC press release frames the issue as one of maintaining federal authority over registered entities and executed derivatives contracts.

Kalshi says it unwound trades—and now faces contradictions

Kalshi’s response highlights the practical dilemma regulators rarely address directly: companies caught between courts can end up violating one authority while trying to obey another.

In a statement posted on X, Robert DeNault, Kalshi’s head of enforcement and legal counsel, said the company is “disappointed” and described the federal action as placing Kalshi in an “impossible position.” DeNault’s statement on X argues that Kalshi already followed the Michigan court order by unwinding the trades, but the new CFTC directive appears to contradict that requirement.

DeNault’s wording underscores the core problem: Kalshi believes it is being pushed into a compliance conflict, where it may be required to reverse actions taken under state instructions while also meeting federal regulatory expectations.

Reuters reported that Kalshi is reviewing the CFTC’s order and considering its next steps. According to Reuters, the company is weighing how to respond given the opposing directives.

Why the regulator says “canceling” is a market-breaking precedent

The CFTC’s position is grounded in the mechanics of derivatives contracting. The regulator argues that canceling trades already executed is not just a procedural change—it threatens contract certainty across the marketplace.

In the same dispute framing, the CFTC characterized cancelation of executed trades as unprecedented and potentially destabilizing. The regulator’s message is that prediction markets operate through contractual certainty, and that undermining that certainty would ripple outward beyond any single platform.

The CFTC also emphasized that it will not allow states or state courts to pressure registered entities into violating the Commodity Exchange Act and CFTC regulations. That argument is aimed directly at the core tension at the center of the Michigan case: whether states can effectively override federal rules through injunctions and court orders applied to an exchange that is already registered with the CFTC.

Broader conflict: federal authority vs. state-by-state attempts

This is not presented by the CFTC as an isolated disagreement. The regulator has repeatedly argued that prediction markets fall within the federal scope when they are run through CFTC-registered structures.

As the dispute is framed, Michigan is described by the CFTC as the first state to attempt interference with executed derivatives transactions through a court order. That characterization matters because it suggests the CFTC views the issue as moving from “licensing and legality” arguments—traditionally handled at the state level—into the domain of how executed federal derivatives contracts must be honored.

During an appearance on Fox Business, CFTC Chair Michael Selig said it is “critical” that the regulator maintains its authority over prediction markets. Selig also stated that the agency has sued nine states and indicated it would continue to challenge states that attempt to impose criminal or civil fines against CFTC-registered exchanges. According to Selig’s remarks, the CFTC’s stance is that state actions cannot be allowed to erode the federal regulatory framework for these markets.

For investors and market participants, the practical implication is that prediction market compliance may remain a moving target. Even where a state court order appears clear, a federal regulator may step in to enforce a different standard. That dynamic increases uncertainty for platforms operating across state lines and could affect how traders evaluate jurisdictional risk when participating in events-based contracts.

What to watch next is how Kalshi navigates the contradiction between the Michigan directive and the CFTC’s order—and whether additional courts or appeals clarify which obligations control when state and federal requirements diverge for already executed derivatives contracts.

This is Part 4 in the technical article series about Bitcoin covenants by Cointelegraph Research. To read the previous article, click here. 

The following opcodes do not independently implement full covenant functionality. Instead, they are building blocks for constructing covenants when combined with other opcodes or script elements.

OP_CHECKSIGFROMSTACK (OP_CSFS) and OP_CAT

OP_CSFS is a proposed opcode that would allow Bitcoin script to verify signatures over arbitrary messages supplied on the stack. It is different from OP_CHECKSIG, which verifies signatures over the spending transaction according to the active SIGHASH mode. By enabling signature verification for data other than the serialized transaction details, OP_CSFS enables a broader class of constructions, including oracle-based scripts where an external party signs off-chain messages that represent real-world events. For example, a trusted oracle could publish Schnorr signatures over messages that encode external outcomes, and an OP_CSFS-based script could condition payments on the presence of a valid oracle signature. 

On its own, OP_CSFS does not implement covenants. It can authenticate external data, but it does not bind that data to the structure of the spending transaction. That binding requires OP_CAT.

OP_CAT is a proposed opcode that enables the concatenation of two values on the script stack to form a single byte sequence instead of two distinct ones. When combined with OP_CSFS, it allows the script to assemble selected transaction fields into a canonical message and verify that a provided signature commits to that message.

OP_CSFS and OP_CAT taken together can perform introspection by compelling the spender to provide transaction details on the witness stack. If both OP_CSFS and OP_CHECKSIG succeed for the same signature, it proves that the correct transaction details have been passed on to the witness stack and can be further reasoned about. By checking the transaction against a predefined template, a covenant construction, similar to OP_CTV, can be enforced. Two minimal assemblies show how this works:

OP_CAT + Schnorr Tricks

Using OP_CAT, covenant-like constructions can be enforced under Taproot without OP_CSFS by exploiting how Schnorr signatures interact with the Taproot sighash rules defined in BIP 341. The construction repurposes OP_CHECKSIG which is ordinarily used to authenticate ownership of a private key, to a transaction introspection tool.

A schnorr signature is a pair ⟨R, s⟩. Under normal circumstances, this schnorr signature is generated by selecting a secret nonce k, deriving the point R = kG, and computing the signature value s as a function of the message hash and the private key. The verifier then checks the signature pair ⟨R, s⟩ against a public key P and the message being signed. The randomness of k ensures that s is unpredictable and non-reproducible without knowledge of the private key.

The introspection trick works by eliminating randomness by fixing some of these variables in advance. Instead of choosing R randomly during signing, the script commits to a predetermined value of R and to a fixed public key P. Because Schnorr verification follows a deterministic equation, it becomes possible to construct these values so that the signature scalar s must equal a hash of specific transaction parameters.

The spender provides R and s on the witness stack. OP_CAT concatenates them into the signature pair ⟨R, s⟩ in the format OP_CHECKSIG expects. The script verifies this against the hardcoded public key P. Because R and P are fixed to the base point G, OP_CHECKSIG will only accept the pair if s equals the SHA256 hash of the actual transaction data computed by the protocol. The spender cannot fabricate an s that passes OP_CHECKSIG unless it genuinely reflects the real transaction data. The spender must grind the transaction data until its SHA256 hash ends in a specific byte, which takes roughly 256 attempts on average and adds negligible cost. 

In this way, OP_CHECKSIG is no longer used to authenticate ownership of a secret private key but instead to enforce that the transaction matches a specific template.  The expressiveness is broadly comparable to OP_CTV.

Because this approach depends on Schnorr signatures and the taproot sighash algorithm, it applies only to SegWit v1 outputs and does not extend to SegWit v0 outputs which uses the BIP-143 digest and ECDSA signatures.

In our next article we will commence our discussion of OP_CCV, which is even more capable than OP_CSFS and OP_CAT combined.

Bitcoin (BTC) should repeat history and put in a bear-market bottom when a classic indicator hits zero, a trader says.

Key points:

• Bitcoin classic two-month stochastic RSI signals are valid this bear market, Max Crypto said.
• The bear market will be over once the indicator reaches zero again.
• RSI divergences provided advance notice of the BTC price rebound beyond $64,000 this month.

Bitcoin stochastic RSI bottom signal “will happen again”

In an X post at the weekend, Max Crypto went on record to forecast the end of the 2026 bear market when the stochastic relative strength index (RSI) hits a new swing low.

“Stoch” RSI is a derivative of RSI, a popular leading indicator, with a greater bias on recent price moves.

“Every time the 2M Stoch RSI had a bullish cross and dropped to 0, $BTC bottomed,” Max Crypto wrote in accompanying commentary. 

“This happened in 2014, 2018, and 2022, and it will happen again.”

BTC/USD two-month chart with stochastic RSI data. Source: Cointelegraph/TradingView

Two-month stoch RSI measures 4.81, having dropped into its sub-30 “oversold” zone during March, data from TradingView confirms. Current levels were last observed just over three years ago.

Stoch RSI has already formed a focus for market participants this year, with daily moves previously drawing comparisons to the 2022 bear market. 

In April, crypto trader Quantum Ascend described BTC price history as “playing out nearly perfectly.”

Bear-market RSI cues keep coming

Turning to traditional RSI data, traders continue to look for bullish cues as BTC/USD treads water above $60,000.

Related: BTC price bull market to begin in September? Five things to know in Bitcoin this week

On Sunday, trader and investor BitcoinHyper eyed a bullish divergence against the S&P 500.

At the start of June, daily RSI dropped to just 15, marking one out of just six of what trader Osemka later called “extremely powerful selling events.”

“There’s been one case where extreme $BTC RSI (1D at 15) failed to break the lows and only managed to sweep it. That was at the end of accumulation range in 2015,” he continued on Tuesday. 

“I’m mentioning it now since we have also only swept the low on such powerful move down.”

BTC/USD one-day chart with RSI data. Source: Osemka/X

Osemka implied that a deeper RSI retracement could still emerge, marking a price reversal in-line with previous bear markets.

Bitcoin’s return above $64,000 this month, meanwhile, came after bullish RSI divergences across multiple time frames.

A solo Bitcoin miner hit the jackpot and validated a solo block with a single Bitaxe mining rig, marking a rare win that beat massive statistical odds.

The retail Bitcoin miner secured a 3.125 Bitcoin (BTC) block reward, currently worth about $200,000, on Friday at block number 957382, according to blockchain data from mempool.space. 

The miner was using a single Bitaxe mining rig, according to the BTC mining pool Public Pool. The Bitaxe was a budget, lower-power Bitcoin miner that costs less than $200 and has a hashrate of about 1 terahash per second (TH/s), which is a tiny fraction of the global Bitcoin network.

The solo block reward shows that even a sub-$200 investment in a mining rig can lead to a statistically rare payday for retail miners. 

Another solo Bitcoin miner validated a solo block in April, through CKPool’s solo mining service. Earlier in February, another retail miner validated a solo block using rented hashrate from a mining provider, meaning that he didn’t own the physical mining rig that solved the block.

Source: Public Pool

Solo BTC miners bag $4.7 million during the past year

While mining a solo block is statistically rare, this marks the 12th Bitcoin block validated by a hobby-level miner so far in 2026, pushing the past 12 months’ total payouts to more than $4.7 million for retail miners.

Solo block stats, one-year. Source: Bennet.org 

Solo blocks mined increased by 41% year-on-year, as solo miners have validated a total of 24 blocks during the past year, according to solo miner data aggregator Bennet. This brings total rewards paid to solo miners to 75.4 Bitcoin, or $4.7 million, for the past year.

Related: Bitcoin whale moves $188M for first time in 7 years

The average interval for solo Bitcoin blocks stands at 15.2 days, while the longest drought without a successful solo block stands at 58 days.

Magazine: Bitcoin nearing late stages of bear market: Jamie Coutts, Real Vision

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.

Fears that artificial intelligence would trigger a wave of catastrophic decentralized finance (DeFi) hacks in what was coined as a “hackpocalypse” have not materialized, according to Dragonfly managing partner Haseeb Qureshi.

While the incident count grew to a record high, the median size of hacks has dipped below $500,000 this year, down from over $2 million in 2025. Qureshi argued that this shows malicious actors using AI are targeting “small protocols and abandonware” while larger DeFi protocols have fortified themselves against AI’s threat.

Excluding outlier months with large incidents, such as the Bybit hack in February 2025 along with the Drift Protocol and KelpDAO exploits in April of this year, 2026 has still seen less value hacked per month than the previous year, said Qureshi.

The comments come in response to concerns shared by blockchain security platform OpenZeppelin’s founder, Manuel Aráoz, who said that he considers “all of DeFi unsafe,” citing the growing ability of AI coding agents to identify smart contract vulnerabilities. 

Broader industry datasets, which include centralized platforms, wallet compromises and phishing, as well as DeFi exploits, offer a less reassuring picture. In April, crypto hacks surged, resulting in losses of around $644 million, marking an over one-year high last seen in February 2025 when the $1.4 billion Bybit hack pushed monthly losses to $1.46 billion, according to DefiLlama.

Source: Haseeb

Crypto hacks fall 47% in H1, but crypto industry not necessarily safer: CertiK

Losses to cryptocurrency hacks fell 46.8% year-on-year to $1.32 billion in the first half of 2026, but blockchain security company CertiK argued that the Web3 industry’s lower headline losses do not necessarily mean the industry is safer.

Related: Belgian police arrest suspected phishing gang leader tied to $572K theft

While it marks a significant drop in dollar value, last year’s figures were skewed by the $1.4 billion Bybit hack, the largest in crypto history, CertiK told Cointelegraph.

During the second quarter of 2026, over 70% of the losses stemmed from the KelpDAO and Drift Protocol exploits, which were largely attributed to North Korean state-sponsored hackers.

Monthly change in crypto exploit amounts and number of incidents across H1. Source: CertiK 

The data underscores the continued threat that North Korean hackers pose to the crypto industry, having stolen more than $6 billion worth of crypto since 2017, TRM Labs estimated in April. 

Magazine: Does Botanix’s failure prove Bitcoiners don’t care about DeFi?

Coinbase, among others, filled that gap in May 2025. Under x402, a server that wants payment answers a request with a 402 and a price. The client signs a stablecoin transfer, usually USDC, resends the request with the payment attached, and gets the data. The exchange takes seconds and needs no account, no card, and no prior relationship between the two sides.

That is why the AI industry cares. An autonomous agent cannot open a bank account, pass a credit check or sign a SaaS contract, but can sign a transaction. Google has wired x402 into its own agent payments protocol, and Cloudflare ships it in its agent toolkit.

The announcement included no usage figures, though x402 publishes them on its own homepage. The protocol handled about 75 million transactions over the past 30 days, or roughly 29 every second, moving about $24 million between some 94,000 buyers and 22,000 sellers.

That works out to an average payment of about 32 cents, meaning the machine-to-machine thesis works as designed, as no card network can process a such small charges profitably.

Still, $24 million a month is a fraction of what any of x402’s premier members move in a day.