Kalshi lawyers met with prosecutors about Polymarket before FBI raid on CEO
Kalshi's lawyers met with federal prosecutors in Manhattan to raise concerns about Polymarket in the months before the November 2024 FBI raid on CEO Shayne Coplan's apartment, according to people familiar with the meetings. Yahoo Finance and the New York Post reported that Kalshi helped set up the raid, which was one of several enforcement actions targeting the crypto-native prediction market during that period. At the time, Polymarket was barred from U.S. operations and had not yet received its 2025 CFTC designation. No charges were specified, and the sources did not confirm a direct causal link between the meetings and the raid.
This revelation lands while Kalshi's federal preemption shield is collapsing across multiple states. The company must now convince the Second Circuit that its CFTC registration protects it uniformly, even as its own behind-the-scenes role in a rival's enforcement becomes public. For traders and regulators, the timing matters: any appearance that Kalshi weaponized prosecutorial channels against a competitor weakens its moral case for federal protection.
The CFTC's own credibility is caught in the middle, since it has intervened to shield Kalshi from state courts while its other regulated platform was still barred from U.S. operations. Polymarket, now legitimately CFTC-designated, gains a grievance that could complicate any shared legal strategy. The Second Circuit will weigh both the preemption law and the conduct of the party asking for it.
the Second Circuit appeal is the last forum where Kalshi can argue for uniform federal protection, tying the FBI-raid revelation to a running string of preemption defeats in New York, Michigan, Illinois, Minnesota, and Washington that now dominate the platform's legal calendar.