Coin Counsel Crypto Brief: New Jersey Takes Kalshi to the Supreme Court, a $500,000-a-Day Michigan Injunction, and a Mushroom Memecoin on Nasdaq

Prediction markets reached the Supreme Court's docket, a Michigan judge put a six-figure daily penalty behind a state ban, and a mushroom memecoin moved a Nasdaq stock 350%. Here is what the last 48 hours mean legally.

New Jersey Asks the Supreme Court to Settle the Prediction Market Question

On September 2, New Jersey became the first state to petition the U.S. Supreme Court on whether state gambling regulators or the CFTC control sports event contracts. It lands atop a circuit split: in April the Third Circuit held the Commodity Exchange Act gives the CFTC exclusive oversight in Kalshi's suit against New Jersey, and last week the Ninth Circuit reached the opposite conclusion in the Nevada litigation, siding with state gambling authorities.

Circuit splits are among the better predictors of a cert grant, though filing a petition guarantees nothing. Until the Court acts, the same contract is defensible in one circuit and exposed in another, and no compliance team resolves that by preference.

A Michigan Judge Puts a $500,000-a-Day Price on Noncompliance

Ingham County Circuit Judge Rosemarie Aquilina issued a preliminary injunction requiring Kalshi to keep blocking Michigan residents from sports event contracts. Attorney General Dana Nessel sued in March under the Lawful Sports Betting Act; a June restraining order preceded an August 17 hearing.

The order is unusually specific. Kalshi must use a geolocation provider licensed by the state gaming regulator, refuse deposits from anyone in Michigan, bar account creation by residents, and stop advertising through apps, push notifications, influencers, affiliates, and paid placements. Violations carry $500,000 per day. Those advertising terms matter: influencer and affiliate marketing is usually farmed out, and an injunction reaching paid placements makes the operator answerable for its contractors.

The CFTC Says CME Has No Standing to Sue

Also on September 2, the CFTC moved to dismiss CME Group's suit over its May 29 order approving Kalshi's bitcoin perpetual futures contract. The agency called the case "much ado about nothing" and argued CME has not plausibly alleged competitive injury, since nothing prevents CME from listing the same contracts. It leaned on CME's own statements that its customers never asked for perpetuals, calling the harm self-inflicted. CME's opposition is due October 2, with a joint briefing schedule due September 4.

Standing is a threshold issue. If the CFTC wins on it, the court never reaches whether perpetual futures were properly approved as futures, so firms waiting on that answer should expect it to outlast this case.

A Mushroom Memecoin Moved a Nasdaq Stock 350%

Farmmi, a Chinese dried-mushroom seller that closed Tuesday near $0.12, traded as high as $0.50 on September 2 after traders piled into JINQIAN, a Robinhood Chain memecoin named for a mushroom in Farmmi's annual report and paired against an onchain token using the FAMI ticker. Over 720 million shares changed hands, some 90 times the daily average. Both round-tripped: the stock settled near $0.15, the token fell more than 90%.

That onchain FAMI token was not one of Robinhood's official stock tokens and appears to have been issued independently. An unaffiliated token trading on a listed issuer's ticker raises the question of who answers to shareholders who bought the spike, and whether it invites manipulation scrutiny.

What This Means for You

If you trade event contracts, assume access can vanish without notice; geofencing orders take effect at once and can strand balances mid-position. If you operate a platform, treat marketing as regulated conduct, because injunctions now name affiliates and influencers directly.

Legally, the circuit split makes jurisdiction strategic, and a favorable federal ruling does not immunize a platform from a state court order. Document compliance decisions now, while the record is being made. Anyone whose losses trace to a misrepresented token, or to a platform that kept taking deposits it was ordered to refuse, should get those facts to counsel early. Limitations periods do not wait for appeals.

At Coin Counsel, we work with individuals and businesses navigating the legal fallout of crypto fraud — whether you're a victim seeking recovery, a company facing regulatory scrutiny, or a project working to stay compliant in an increasingly complex legal landscape. The rules are evolving fast, and the cost of getting it wrong has never been higher. Contact us at coin-counsel.com to speak with a crypto-focused attorney today.

Disclaimer

This blog post is for informational purposes only and does not constitute legal advice. Reading this content does not create an attorney-client relationship between you and Coin Counsel or Franco Law PLLC. The legal landscape surrounding cryptocurrency is rapidly evolving and varies by jurisdiction. Do not act or refrain from acting based on information in this post without first consulting a qualified attorney. If you believe you have been the victim of crypto fraud, contact us at coin-counsel.com for a consultation.