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Federal Judge Blocks Arizona Criminal Case Against Kalshi

Federal Judge Blocks Arizona Criminal Case Against Kalshi

Plus Elon's current losing streak in court.

Bruce Carton
April 13, 2026

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Sophie Lienard-Lévy is joining L'Oréal as General Counsel - Global Head of Compliance & Regulatory Affairs in France.

Clips ✂️

US judge blocks Arizona criminal case against Kalshi at CFTC’s request

A federal judge on Friday blocked Arizona from continuing its criminal case against prediction market Kalshi, according to the ?Commodity Futures Trading Commission, which sued to prevent states from regulating the ?industry.

The CFTC announced the ruling in a press release following a hearing before U.S. District Judge Michael Liburdi in Arizona.

The agency said the court granted its request for a temporary ?restraining order barring the state from continuing to pursue criminal charges against ?CFTC-regulated designated contract markets.

“Arizona’s decision to weaponize state criminal law against ?companies that comply with federal law sets a dangerous precedent, and the ?court’s order today sends a clear message that intimidation is not an acceptable tactic ?to circumvent federal law,” CFTC Chairman Michael S. Selig said in a statement.

Kalshi attorney Robert Denault praised the ruling in a social media post, saying “federal law is supreme” under the U.S. Constitution.

by Reuters

Elon Musk hits legal losing streak ahead of showdown with OpenAI’s Sam Altman

Elon Musk has suffered the worst streak of courtroom losses in a career punctuated by legal battles, showing the pitfalls of his aggressive litigation tactics and polarising public persona ahead of a showdown with Sam Altman and OpenAI later this month.

Since January, Musk has faced setbacks in cases about OpenAI allegedly stealing secrets from his xAI start-up, advertisers’ boycott of X and two suits about his 2022 takeover of the social media group, then called Twitter, including a fraud verdict that could cost him billions of dollars.

The billionaire’s legal team has responded by complaining about “bias” against the world’s richest man. They have objected to a Delaware judge “liking” a LinkedIn post critical of Musk and challenged the Twitter verdict over what they called a “bizarre and highly questionable” joke involving the marijuana reference “4.20” in a jury document.

As he prepares for the trial against OpenAI later this month in Oakland, California, in which Musk claims the AI start-up sold out its charitable purpose, the seemingly endless courtroom battles have exposed Musk to embarrassing questions and irked his own staff.

by FT

👉 I mean, when you’re In Court Every Day you’re bound to have some losing streaks, right?

The FT article by Stephen Morris, George Hammond and Sujeet Indap adds that taking a few losses in these recent cases won’t necessarily “impose accountability” on Musk as his “$630bn fortune means he can easily swallow these judgments.”

The article quotes Ann Lipton, a law professor at the University of Colorado: “Damages are not just supposed to be compensation, they are meant to be prohibitions. Musk can pay the money without even noticing, which gives him permission to violate the law that most of us don’t have.”

Trump-Linked World Liberty Project Faces Investor Revolt

World Liberty Financial Inc., a Trump family crypto venture, is facing an investor revolt that includes billionaire backer Justin Sun, who accused the project of secretly building controls that let insiders freeze token holders’ funds.

Sun, who poured tens of millions of dollars into World Liberty, called the project “a trap masquerading as a door” in a post on X on Sunday.

His denunciation adds to mounting criticism over a move by the project to deposit its own WLFI tokens as collateral on a lending platform and borrow $75 million against them. Critics say the maneuver could let World Liberty extract cash before a wave of tokens are unlocked, flooding the market with new supply.

World Liberty says it can top up its collateral to prevent that and has roundly rejected the criticism.

by Bloomberg

Response to LinkedIn commentary regarding SEC enforcement, crypto regulation, and Blockchain technology

Chris Davis has raised thoughtful objections to my recent SEC posts. He deserves a substantive response — but LinkedIn’s character limits don’t permit it. So I’ve written him an exhaustive memorandum, linked below. Here’s a quick summary:

by John Reed Stark on LinkedIn

👉 TLDR version: John Reed Stark wrote an article about the SEC and Chris Davis of law firm Gray Reed wrote a comment with “thoughtful objections.” Historically, that is the end of these exchanges, unless there is perhaps some more back and forth in the comments.

Not this time! Stark changed the whole LinkedIn comment game by replying with a 7-page “exhaustive memorandum” in response (or, as former FINRA Enforcement Chief Brad Bennett observed on LinkedIn, “JRS brings a gun to a gun fight!”)

You might think that would be the end of this exchange, but Davis then commented further on Stark’s response. That led Stark to bring a bazooka tank battleship to a knife fight: a new 30-page memorandum.

Jobs

Want to work in the SEC’s Cyber and Emerging Technologies Unit? (link to Laura D’Allaird’s post on LinkedIn is here, or just click on the image below). D’Allaird is Chief of the CETU.