Michigan | Crypto

The preliminary injunction lasts until final order, adds a futures broker notice duty and lands amid an appellate split. The post Kalshi faces $500,000 daily fines as Michigan forces sports event contracts offline appeared first on CryptoSlate.

Kalshi previously said it had been placed in an “impossible position” after federal authorities directed the company to ignore a Michigan restraining order issued in June. Update (Sept. 3, 9:20 pm UTC): This article has been updated to include a statement from Kalshi. Michigan’s attorney general announced that a state court had ordered a preliminary injunction against Kalshi, blocking the prediction markets platform for residents amid what officials called “sports betting [...] masquerading as an investment opportunity.” In a Wednesday notice, Attorney General Dana Nessel said that the Circuit Court for the 30th Judicial Circuit in Ingham County approved an order blocking Kalshi from offering event contracts to state residents. The company could be fined up to $500,000 per day for violations. Read more

Hyperscale Data’s Bitcoin holdings have fallen about 79% since late July to 215 BTC as it redirects capital toward its Michigan AI data center. Hyperscale Data has ended all Bitcoin mining operations at its Michigan facility as it prepares the site for an artificial intelligence data center customer.  On Wednesday, the company said that all Bitcoin miners at the facility were switched off following an inspection by the unidentified California-based neocloud provider. Hyperscale said it intends to sell the associated mining equipment.  Hyperscale said the AI customer has contracted for 20 megawatts (MW) of computing capacity under a 10-year master services agreement with two optional five-year extensions. The agreement may generate more than $1.2 billion over the maximum 20-year term. An additional 32 MW option could lift potential revenue above $3 billion, while the site is expected to support 340 MW.  Read more

The Bitcoin miner is using part of its treasury and a BTC-backed credit facility to fund an AI campus tied to a potential multi-billion-dollar infrastructure contract. Bitcoin miner Hyperscale Data has sold about 100 Bitcoin and secured a Bitcoin-backed credit facility to help finance construction of its Michigan AI data center, according to a Thursday announcement. The company said proceeds from the Bitcoin (BTC) sale are being used to fund construction and purchase critical infrastructure and long-lead equipment for its Michigan campus. The Bitcoin-backed credit facility is expected to provide financing at variable interest rates of about 4.5% to 5.0%. The campus is being developed to support a previously announced master services agreement with an unnamed AI infrastructure provider, initially covering about 20 megawatts of AI compute capacity. The 10-year agreement includes two optional five-year extensions and is expected to generate more than $1.2 billion in revenue if fully exercised. Read more

“We are disappointed by this decision and believe it is unfair to Kalshi,” the company’s legal counsel said on X. Kalshi says it is being put in an “impossible position” after the US commodities regulator on Tuesday said it was blocking the prediction market platform from canceling trades in Michigan, contradicting a recent state court order. On June 29, Kalshi was ordered by Ingham County Circuit Court Judge Rosemarie Aquilina to cease offering sports betting contracts to Michigan users while a lawsuit over whether Kalshi violated the state’s sports betting laws plays out. The Commodity Futures Trading Commission ordered Kalshi on Tuesday not to comply with the state order and continue operating. “We are disappointed by this decision and believe it is unfair to Kalshi,” Robert DeNault, the company’s head of enforcement and legal counsel said in a statement on X.  Read more

The federal derivatives regulator, which oversees trading at Kalshi, argued it was inappropriate for Michigan to "bully" the firm into reversing trades.

A Michigan judge granted a restraining order preventing the prediction market from offering sports-related wagers for the next 14 days.

A Michigan Judge has temporarily blocked Kalshi from offering sports betting contracts to residents, escalating the state-federal fight over prediction markets and gambling laws. A Michigan judge temporarily blocked prediction market Kalshi from allowing residents to place bets on sporting events, after the state's attorney general accused the platform of violating gambling laws. Kalshi was hit with a temporary restraining order from Ingham County Circuit Court Judge Rosemarie Aquilina, who said the platform would be fined $120,000 for each day it fails to comply with the order’s geolocation requirements, according to a Monday court filing. The order lasts for 14 days and expires on July 13. Aquilina wrote that Michigan residents would suffer irreparable harm from being “exploited by Kalshi's sports betting operation masquerading as an investment opportunity.”  Read more

The US city is expected to pen an amicus brief in Coinbase's lawsuit against the state of Michigan, which the exchange filed ahead of its prediction markets launch. Lawyers representing the US city of Detroit plan to file an amicus brief in Coinbase's lawsuit against Michigan, which argues that federal regulators should have authority in overseeing prediction markets and not states.  In a Thursday filing in the US District Court for the Eastern District of Michigan related to state officials’ motion for a preliminary injunction, District Judge Shalina Kumar approved an order which will allow Detroit to file a brief supporting state authorities in their lawsuit against Coinbase. Kumar gave Detroit’s lawyers until April 3 to make the filing as the lawsuit continues.  In December, Coinbase filed its lawsuit against Michigan, as well as gaming authorities in Connecticut and Illinois, more than a month before the crypto exchange announced the launch of its prediction market services on the platform. Read more

The State of Michigan Retirement System has nearly tripled its Bitcoin ETF holdings, signaling rising institutional confidence in digital assets. Michigan’s state pension fund has significantly increased its exposure to Bitcoin (BTC) via the ARK 21Shares (ARKB) exchange-traded fund, highlighting how ETFs are streamlining access to digital assets for institutional investors. By the end of the second quarter, the State of Michigan Retirement System owned 300,000 ARKB shares, worth $10.737 million, according to regulatory filings with the US Securities and Exchange Commission (SEC). This marks a notable increase from the 110,000 shares it held in the previous year. ARKB is one of the 11 spot Bitcoin ETFs approved by the SEC in January 2024, offering direct exposure to the cryptocurrency.  Read more

Michigan lawmakers introduced four crypto bills in one day, covering crypto in state retiree funds, CBDCs and Bitcoin miners operating at abandoned oil and gas sites. Michigan lawmakers have introduced four crypto-related bills covering crypto mining, central bank digital currencies (CBDCs) and crypto in state retirement funds. Republican state Representative Bill Schuette introduced House Bill 4510 on May 21, which would amend Michigan’s Public Employee Retirement System Investment Act to allow the state treasurer, currently Rachael Eubanks, to invest in cryptocurrencies that have averaged a market cap above $250 million over the last calendar year. Bitcoin (BTC) and Ether (ETH) are the only cryptocurrencies that currently meet that threshold. The bill adds that any cryptocurrencies must be held in the form of an exchange-traded product issued by a registered investment company. Read more