There are reports that the U.S. Commodity Futures Trading Commission (CFTC) may move to sanction prediction market platform Kalshi.

According to a recent Politico report, the CFTC is investigating whether Kalshi failed to properly follow required filing procedures as it introduced dozens of new contracts. The CFTC also warned Kalshi about the possibility of sanctions.

Kalshi said there were procedural mistakes in submitting some contracts and that many of them have not been launched yet, adding it is addressing the issue.

The investigation has been continuing for months. The focus is the self-certification system for new prediction market contracts. Under current rules, exchanges can begin trading as soon as the next day without separate approval if they notify the CFTC that a new product meets regulatory requirements.

In July, the CFTC warned prediction market operators not to use overly broad language when certifying new products.

The CFTC is also investigating whether Polymarket violated the terms of a 2022 settlement to restrict access by U.S. users.

Politico reported that regulatory pressure on U.S. prediction markets is growing as Democrats prepare to strengthen oversight of prediction markets after the midterm elections.