Thirty days to be available everywhere, including the places a judge said no.

This was a week of paperwork with consequences. The Commodity Futures Trading Commission told the exchanges it registers that blocking traders by state breaks its rules.

A federal judge let single-stock perpetuals keep trading while doubting the agency had the power to approve them. And on Friday, Treasury took two swings at Iran-linked crypto flows. I’ll start with the CFTC, because its demand runs straight into several court orders.

The setup

On Thursday 5 Nov the CFTC issued an interpretation of Regulation 38.151(b), which requires designated contract markets (DCMs) to give “impartial access” to their markets. Its new reading is that domestic geographic restrictions generally violate that rule. DCMs must drop such restrictions within 30 days or send the Division of Market Oversight an explanation of why that “is not feasible”.

“Geographic access restrictions are inconsistent with those purposes and the Act’s impartial access requirements,” Chairman Michael Selig said.

The stakes

The obvious target is sports event contracts.

Kalshi has geofenced those contracts in Michigan, Nevada and Washington under court orders, InGame reported. Prediction-market arms of licensed sportsbooks also block states where gaming regulators have threatened their licences, InGame noted. The interpretation applies to intermediaries as well as exchanges, so brokers that route customers to a DCM are covered too.

The release does not say whether the 30 days run from 5 Nov or from publication in the Federal Register. Counted from Thursday, they end on Saturday 5 Dec. Nobody outside the agency seems sure what counts as an acceptable “not feasible” letter, and the release says only that the commission will look at the facts of each case.

The read

The CFTC’s argument is about liquidity. Where a contract draws mostly regional interest, “excluding such regions could decrease the contracts’ overall liquidity,” the interpretation says, according to InGame, which gives a home team’s playoff chances as the example.

The procedural problem is simple to state. An agency interpretation tells registered firms how the regulator reads its own rule; it does not lift an injunction a court has already issued.

The guidance does not say what an exchange should do when the two collide, SBC Americas noted. A Kalshi spokesperson told InGame the company is “evaluating the new guidance”.

What critics say: courts have already weighed this argument and rejected it. In August the Ninth Circuit called Kalshi’s claim that it could not both obey Nevada’s geofencing order and meet federal access rules “a false, all-or-nothing proposition”, SBC Americas reported. The Sixth Circuit reached a similar view in September, NextPredict reported.

Our recent coverage of a federal judge’s injunction keeping Kalshi’s sports contracts off two tribes’ lands and Arkansas’s deceptive-practices suit against Kalshi shows how many fronts are open.

The CFTC is also defending its reach in New York. On 3 Nov, Judge Valerie Caproni refused the Capital Markets Alliance’s request for a temporary restraining order against single-stock perpetuals approved for Kalshi, Bitnomial and Coinbase Derivatives, rg.org reported. She found no showing of irreparable harm.

She also found the alliance likely to succeed on the merits, writing that the contracts “appear to satisfy the definition of a swap, which are subject to regulation by the Securities and Exchange Commission, not by CFTC”. Background is in the CFTC’s equity perpetuals decision and the lawsuit it drew.

Treasury, meanwhile, was busy on Friday. FinCEN cut MEXC Global off from US banks (see FinCEN’s MEXC order), and OFAC sanctioned eight Canadian money exchangers.

FinCEN and the Fed also withdrew the $250 Travel Rule plan. The SEC’s crypto broker-dealer draft and the Labor Department’s 401(k) rule are both still under White House review. Neither text is public.

Paper trail

The calendar

  • Mon 9 Nov: The FinCEN–Fed withdrawal of the $250 Travel Rule proposal is published in the Federal Register, which makes it final.
  • Tue 10 Nov, 13:30 UTC (14:30 CET): US consumer prices for October (BLS). Not a crypto rule, but rate expectations move crypto.
  • Tue 10 Nov: The Capital Markets Alliance’s reply is due on its preliminary-injunction motion against the stock-perpetuals approvals, rg.org reported.
  • Wed 11 Nov: Veterans Day. US federal offices are closed.
  • Fri 13 Nov: In the California tribal case, the tribes are due to give Kalshi maps of the lands the injunction covers.
  • Watch for: Federal Register publication of FinCEN’s MEXC order, which starts its 30-day clock, and of the CFTC interpretation.
  • Sat 5 Dec: End of the CFTC’s 30-day window, if it runs from 5 Nov.

Questions or tips on what to cover next week? Write to [email protected].

This article is for information only and is not investment advice.