KalshiEX LLC

Kalshi is an American financial exchange and prediction market based in New York City that offers event contracts. Founded in 2018 by Tarek Mansour and Luana Lopes Lara, Kalshi launched in July 2021 as the first federally regulated exchange for event contracts in the United States.
KalshiEX LLC, or simply Kalshi, is a U.S. Commodity Futures Trading Commission licensed Designated Contract Market in which users buy and sell contracts on events based on their perceived probability. It won approval from the CFTC to run a derivatives exchange in November 2020. 
Kalshi was funded by a pool of prominent investors including Sequoia Capital and Charles R. Schwab. It raised $30 Million in a Series A funding led by Sequoia, with participation from Charles Schwab, Henry Kravis, co-chairman & co-CEO of KKR, SV Angel, and previous investors including Neo and YC Continuity.
Kalshi’s contracts are cheaper to trade than traditional derivatives. Its website advertises that it takes just three minutes for users to sign up for trading, and the exchange establishes a maximum position of $25,000 per participant.
== History ==
Kalshi was founded in 2018 by MIT graduates Tarek Mansour and Luana Lopes Lara. The company spent its first three years working to obtain regulatory approval from the Commodity Futures Trading Commission (CFTC). In November 2020, Kalshi received approval to operate as a Designated Contract Market (DCM).
In November of 2021, former CFTC Commissioner Brian Quintenz joined the board of directors of Kalshi.
On March 18, 2024, the company began listing prediction markets on five different cryptocurrency price outcomes (e.g. "How high will ETH get in 2024?" or "When will bitcoin reach $100,000?"). The bets settle in U.S. dollars, like all others on Kalshi.
In January of 2025, Kalshi appointed Donald Trump Jr. as a strategic adviser.
=== Kalshi's Election Event Contracts Controversy ===
In June 2023, Kalshi, a regulated commodities exchange, sought to offer "Congressional Control Contracts" that would allow individuals to bet on the outcome of U.S. congressional elections. These contracts would enable participants to take positions on which political party would control the U.S. House of Representatives and the Senate.
On September 22, 2023, the Commodity Futures Trading Commission (CFTC) issued an order prohibiting Kalshi from listing the Congressional Control Contracts. The CFTC determined that the contracts involved gaming and unlawful activity, and were contrary to the public interest. In response, Kalshi challenged the CFTC's decision in the U.S. District Court for the District of Columbia, arguing that the CFTC's order was arbitrary, capricious, and contrary to law under the Administrative Procedure Act.
On September 6, 2024, District Judge Jia Cobb ruled in favor of Kalshi, vacating the CFTC's prohibition. The court found that Kalshi's contracts did not involve unlawful activity or gaming, but rather involved elections, which were neither. The CFTC appealed this decision and sought an emergency stay, which was denied by the U.S. Court of Appeals for the D.C. Circuit on October 2, 2024. This ruling allowed Kalshi to offer its platform for the public to place bets on the outcome of upcoming U.S. congressional elections in the lead-up to the November 2024 elections.
Despite winning the landmark court ruling that paved the way for election betting, Kalshi still faces regulatory hurdles in Washington because the limits on what types of contracts can be listed on regulated U.S. prediction markets aren’t entirely clear. Under the 2010 Dodd-Frank law, Congress prohibited contracts tied to terrorism, assassination, war, gaming or activities banned by federal or state law. But the details of what contracts are covered by that ban were left to the CFTC.
=== Controversy Over UnitedHealth Group CEO Murder Contracts ===
In December 2024, Kalshi faced controversy after listing contracts related to the murder of UnitedHealth Group CEO Brian Thompson. The contracts allowed users to bet on various aspects of the case, including whether the suspect, Luigi Mangione, would be extradited to New York from Pennsylvania and whether he would be convicted or plead guilty.
The listing of these contracts raised ethical concerns and prompted regulatory scrutiny. Critics argued that such contracts lacked legitimate economic purpose and could bring disrepute to financial markets. The Commodity Futures Trading Commission (CFTC) intervened, leading Kalshi to halt trading on these contracts two days after their introduction.
This incident highlighted the ongoing debate surrounding the boundaries between legitimate event contracts and gambling, as well as the challenges faced by regulators in overseeing novel financial products.
== Products and Services ==
Kalshi offers a platform where users can trade on the outcomes of future events across various categories, including economics, politics, climate, and entertainment. The exchange provides binary contracts that pay out $1 if the specified event occurs and $0 if it does not. Users can buy or sell these contracts at prices between $0 and $1, with the price reflecting the market's estimated probability of the event occurring.
== Kalshi Klear ==
Kalshi Klear LLC is the clearinghouse affiliate of KalshiEX LLC, a designated contract market registered with the Commodity Futures Trading Commission (CFTC). On August 28, 2024, Kalshi Klear received an Order of Registration as a derivatives clearing organization (DCO) under the Commodity Exchange Act.
Following this registration, Kalshi transitioned from using LedgerX LLC (d/b/a MIAX Derivatives Exchange, or "MIAXdx") as its clearinghouse to using Kalshi Klear. On August 23, 2024, Kalshi notified its customers about the impending transfer of positions and funds from MIAXdx to Kalshi Klear.
The transition process involved the automatic transfer of all open interest (positions in Kalshi contracts), associated collateral, and other deposits from MIAXdx to Kalshi Klear. Kalshi participants were not required to take any action for the transfer to occur, though they were given the option to close positions and withdraw funds if they did not wish to transition to Kalshi Klear.
== Key People ==
* Tarek Mansour, co-founder and CEO
* Luana Lopes Lara, co-founder and COO
== References ==
Category:Designated Contract Markets
Category:Futures Exchanges
Category:Financial Technology
Category:Prediction Markets
Category:Exchanges
Category:Companies Founded in 2018
Category:Commodity Futures Trading Commission
Category:Derivatives
Category:Legal and Regulatory