CME battles Kalshi on several fronts as Phantom adds new distribution

Crypto wallet Phantom has switched on Kalshi-powered event contracts for US customers. This gives Kalshi another distribution channel; however, it is coming around the same time that CME Group is fighting the prediction market platform in federal court, before the SEC, and now in the oil pit.

On the other hand, CME’s prediction market venture, FanDuel, has shrunk, while platforms like Kalshi and Polymarket have since expanded where they can trade.

Event contracts have become a contested frontier between the platforms offering those contracts, regulators, and other firms that have been playing in the space or adjacent sectors. This time around, it has been CME, one of the oldest and largest derivatives marketplaces in the US, arguing that Kalshi is breaking rules as it continues to expand.

Phantom opens another door for Kalshi

Phantom users can now buy and sell Kalshi event contracts inside the app, and they will get access to more Kalshi offerings in the coming weeks.

Currently, trades are funded with CASH, which is Phantom’s dollar-pegged stablecoin. The funds are then routed to Kalshi for settlement before winnings return to a user’s Phantom Cash account.

Phantom quoted a feed of two cents per contract plus a small network fee.

While this new distribution channel has opened for Kalshi, it has not taken away the headaches that it is facing with state regulators across the US.

Several states challenge Kalshi’s position that federal oversight shields its contracts from state gambling laws.

In its announcement, which was released on Thursday, October 22, Phantom said that certain market categories will not be accessible to users in Michigan, Nevada and Washington. This is not unrelated to the various lawsuits that Kalshi is facing in those states.

Phantom received a conditional no-action letter from the CFTC in March, and this spares it from registering as a broker. That relief has since been widened to other software providers.

Kalshi has logged more than $291 billion in volume this year, and it has already reached $55.33 billion in October with nine days to run, on track to top September’s record of $59.32 billion per The Block data.

CME’s fight widens into oil

On October 20, Kalshi asked the CFTC to approve WTIPERP, a cash-settled West Texas Intermediate crude contract that never expires. If cleared, it would be the first energy “perp” available in the US.

The contract would track a constant one-month WTI price calculated by Pyth Network and represent 100 barrels against the 1,000 barrels in a standard NYMEX contract. NYMEX is owned by CME.

Kalshi is pursuing voluntary approval, which gives the CFTC between 45 and 90 days to decide. The exchange already runs a related product, WTIFUTURE, which it self-certified on October 7. That contract behaves like a perpetual but carries a ten-year maturity. It was doing $57 million in daily volume with up to 5.9 times leverage.

The lawsuit CME is losing ground on

CME sued the CFTC on June 18 over the regulator’s May 29 approval of Kalshi’s Bitcoin perpetual, BTCPERP, as Cryptopolitan reported.

CME’s argument is that contracts with no expiry are swaps under Dodd-Frank, not futures, a label that changes margin, registration, and tax treatment.

The agency wants the case gone. On October 16, the CFTC asked Judge Colleen Kollar-Kotelly to dismiss, saying CME had not shown it was harmed. The agency pointed to CME’s own figures, with monthly crypto futures volume climbing from roughly 2.66 million contracts in May to 3.28 million in September, and to Chairman Terrence Duffy’s statement that clients were not asking for perps. The regulator argued that CME lacks standing.

The pressure is not only in commodities. On October 14, CME, Nasdaq and Cboe lodged objections with the SEC over Kalshi’s separate plan for perpetual security futures tied to individual stocks. Kalshi, meanwhile, launched a US500 perpetual on October 6.

CME’s own prediction bet has shrunk

While Kalshi adds venues, CME’s consumer play has pulled back. FanDuel Predicts, the app CME launched with FanDuel in December 2025, has since been rewired so that sports wagers run through Crypto.com’s Nadex rather than CME. 

CME, which holds a 51% stake in the joint venture, now processes only the non-sports contracts, which it said account for under 1% of the app’s activity.

CME’s prediction-market volume during the first two weeks of July was estimated to be about 0.02% of all volume from US regulated entities.

The contrast is sharp compared with CME’s core business. The exchange posted record third-quarter revenue of $1.74 billion, up 13% from a year earlier. The futures giant is thriving; however, its bet on prediction markets is not.