The Commodity Futures Trading Commission is investigating if prediction market platform Kalshi failed to properly inform the agency of proposed event contracts, Kalshi confirmed to CNBC.
Kalshi called it a minor issue in how the contracts were filed and said it is working with the CFTC to address the matter. The CFTC flagged weather-related contracts, Kalshi said. The leading prediction market platform didn't say when the agency began investigating Kalshi. The CFTC didn't immediately respond to a request for comment.
Politico first reported on the probe on Tuesday, noting charges could happen soon, based on the CFTC's private notification to Kalshi. The platform declined to comment on any possible charges.
Prediction market platforms are allowed to self-certify event contracts without the federal agency's prior approval, as long as they comply with the Commodity Exchange Act. The self-regulation allows for faster introduction of new contracts.
"The notice is about a procedural error involving the submission of a handful of contracts, many of which weren't live," said Elisabeth Diana, head of communications at Kalshi. "We are already addressing the issue."