Morning Minute: The CFTC Bails Out Kalshi in NY

Morning Minute is a daily newsletter written by Tyler Warner. The analysis and opinions expressed are his own and do not necessarily reflect those of Decrypt.

GM!

Today’s top news:

• Crypto majors chop ahead of CPI, ETH leads; BTC at $64k
• SEC plans to move forward with crypto rulemaking Friday, including tokenized securities
• Robinhood Chain does 10x the revenue of Base, TVL nears $500M
• Harmony exploit led to 26% of the supply minted
• CFTC invokes emergency authority to keep Kalshi running in NY State

⚖️ The CFTC Shields Kalshi From New York, Just as Its Revenue Doubles

The federal government just overruled a state trying to shut down a prediction market.

The CFTC invoked “emergency authority” on Tuesday to order Kalshi to keep operating in New York, days after Attorney General Letitia James sued to block its sports contracts. Kalshi asked the regulator to step in, and it did.

The stakes are enormous. According to The Information, Kalshi has topped a $4 billion annualized revenue run rate, double its level from two months ago, and is raising at a $40 billion valuation. So states are trying to rein it in exactly as it becomes one of the fastest-growing companies in finance.

New York argues sports prediction markets are gambling that dodged state licensing and taxes, revenue that it says funds schools and problem-gambling programs. The CFTC counters that these are federally regulated swaps. Chairman Mike Selig, a crypto-friendly Trump appointee, said “Congress did not intend for derivatives exchanges to be regulated under a patchwork of state gaming laws,” accusing New York of trying to make the contracts “waste away under its iron curtain of state gaming laws.” He argued these are interstate financial markets that New York “has no business” regulating.

It’s a pattern now. This is the CFTC’s third intervention for Kalshi after a similar move in Michigan, and it has separately sued New York outright. But the underlying cases are unresolved, and a judge already ruled against Kalshi’s bid to stop the suit. All while Kalshi just keeps printing increasing revenue and raising at higher and higher valuations.

The whole bet at this point hinges on one question: whether a federal license lets these platforms run nationwide, or whether fifty state regulators each get a veto. The CFTC just threw its full weight behind the first answer, and with revenue doubling, both sides have billions of reasons to win.

🌎 Macro Crypto and Markets

• Crypto majors are mostly flat ahead of CPI this morning; BTC -0.2% at $64k; ETH +1% at $1,910; SOL +1% at $77; HYPE +0.4% at $55.80
• Top alt movers include CC (+5%), CRV (+4%) and NEAR (+3%)
• Oil +1% at $83; Gold +0.7% at $4,470
• Stock futures are slightly green ahead of CPI; DOW +0.1%, Nasdaq +0.6%
• The SEC set an August 14 meeting to propose “Regulation Crypto,” its first formal crypto rulemaking, which would let projects raise capital without registering securities and exit SEC oversight once they decentralize, the agency’s answer to the Senate stalling the CLARITY Act
• Strategy's credit model sets STRC's undercollateralization floor at $16,184 and its total debt-and-preferred floor at $20,587, meaning Bitcoin would need to crash roughly 68-75% before the structure breaks, per data Saylor shared
• Trump Media's crypto bet drove a $238 million quarterly loss, as the company behind Truth Social booked steep markdowns on the digital-asset treasury and prediction-market ventures it recently abandoned
• Crypto-friendly bank Erebor is in talks to raise $1.5 billion at a $9.5 billion valuation, per the FT
• MoneyGram expanded on Solana with a global crypto-to-cash service, letting users convert stablecoins to physical cash across its worldwide agent network
• Exchange spot volume fell 21.7% in July to $429 billion across 14 major venues, with every exchange down month over month; Binance led at $196.5 billion (45.8% of the total), followed by OKX and Bybit

Corporate Treasuries & ETFs

• The Bitcoin ETFs saw $8M in net inflows on Tuesday; the ETH ETFs saw $1.7M in outflows
• Fidelity is adding staking and quarterly cash distributions to FETH, its $900M ETH ETF, staking up to 100% of holdings and passing net rewards to investors while keeping 85% of gross rewards

Meme Coin Tracker

• Meme leaders were mixed; DOGE +2%, SHIB even, PEPE -1%, PENGU -2%, TRUMP -2%, BONK -4%
• Robinhood chain was led by HMM (+100%) and AI (+40%) while other leaders declined
• Solana leaders included Plumber (+35x), Alon (+20%) and Jimothy (+36%); Stonk briefly hit a new ATH at $15M after a Solana rt (now back at $12.5M)

💰 Token, Airdrop & Protocol Tracker

• Robinhood Chain is now doing 10x the revenue of Base, while its TVL nears $500M
• Harmony suffered an unauthorized mint of 4 billion ONE, about 26% of supply, crashing the token as 2.8 billion was dumped to exchanges; the network is pursuing freezes and a possible rollback

🚚 What is happening in NFTs?

• NFT leaders were slightly red; Punks -1% at 31.7 ETH, BAYC even at 8.17 ETH, Pudgy -1% at 3.92 ETH; Stonkbrokers -7% to 12.5 ETH
• Cash Cats (+155%) and Normies (+65%) led top movers
• New project Yardkeepers debuted and ran to a 0.7 ETH floor (YARD token at $4M)
• The FWA team debuted user profiles and a chat app, while teasing personal pools coming soon; FWA ran to $40M and a new ATH before retracing (now $31M)