Appeals Court Denies Coinbase, Kalshi Interim Relief

The Second Circuit left the two prediction-market platforms without temporary protection from state enforcement in Connecticut and New York.

Updated on Nov. 5, 2026 in Gambling

Bold flat-color editorial illustration of a steel padlock resting on a cracked concrete slab, evoking unresolved legal barriers around prediction markets. — The Second Circuit denied Coinbase and Kalshi interim relief on Tuesday, leaving both prediction-market platforms exposed to enforcement actions in Connecticut and New York while their appeals proceed. AI Illustration. Upload story photo >

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The U.S. Court of Appeals for the Second Circuit denied interim protection to Coinbase and Kalshi in enforcement cases involving Connecticut and New York. The order does not resolve the underlying appeals or direct either platform to halt trading or close existing positions.

Why it matters

The ruling leaves prediction-market platforms exposed to state enforcement while federal and state authorities contest jurisdiction over event-based contracts. Gambling-law questions for sports and event contracts remain unsettled across several states.

The order was issued by the Second Circuit and denies temporary relief pending appeal, while the merits of the cases remain open. A separate Utah appeals court denied Kalshi interim relief in September, and a lower court allowed Utah to apply gambling laws to Kalshi's sports contracts.

The players

Kalshi

Kalshi is a federally regulated prediction market platform that lists event-based contracts, including sports contracts, and has been litigating against state gambling regulators.

Coinbase

Coinbase is a major U.S. cryptocurrency exchange that has entered the prediction-market business and is contesting state enforcement in the Second Circuit cases.

Commodity Futures Trading Commission

The Commodity Futures Trading Commission is the federal agency that regulates U.S. derivatives markets, and it has sued Utah to block state enforcement against federally regulated prediction markets.

The details

The Second Circuit's denial means Coinbase and Kalshi have no temporary shield from enforcement actions in Connecticut and New York while their appeals proceed. The order does not direct the platforms to halt trading or close positions already held by users.

September 2026: A Utah appeals court denied Kalshi's request for interim relief.
November 5, 2026: The Second Circuit denied interim protection to Coinbase and Kalshi.

Industry Dynamics

The CFTC has sued Utah to block state investigations of federally regulated prediction markets, and the Second Circuit ruling pushes that federal-versus-state contest into New York and Connecticut. Whether event contracts fall under federal derivatives law or state gambling statutes is now being tested across multiple circuits.

Users of Kalshi and Coinbase prediction markets in Connecticut and New York may face enforcement uncertainty while the appeals continue. The order does not require platforms to close existing positions, so current contracts are not directly affected by this ruling.

The takeaway

Prediction-market users in affected states should watch for platform policy changes as the appeals proceed. Federal and state rules on event contracts remain in flux, so the legal status of these products may shift again.