Tennessee suspends sports betting operations on three major platforms, with violations fined up to $25,000

TokenomicsTrapper · 2026-01-11T00:42:14+00:00

Tennessee issues cease and desist orders to Kalshi, Polymarket, and Crypto.com for illegally offering sports event contract trading services without state licenses. Non-compliance could result in hefty fines and felony charges, highlighting the regulatory fragmentation issues faced by the crypto market in the US.

TokenomicsTrapper

2026-01-11 00:42:14

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[BitPush] The Tennessee regulatory authorities in the United States recently issued cease and desist orders to three crypto trading platforms—Kalshi, Polymarket, and Crypto.com—demanding that they immediately stop offering sports event contract trading services to users in the state.

What is the cause of this? Although these three platforms are registered as designated contract markets with the U.S. Commodity Futures Trading Commission (CFTC), Tennessee believes they are providing sports betting functionalities without obtaining state-level licenses, which directly violates the state’s gambling laws. The state regulatory department explicitly stated in the notice that any business involving sports betting must hold a license issued by the state government, and none of these three companies have obtained such licenses.

The cease and desist order requires these platforms to complete three tasks by January 31: cease all operations in Tennessee, cancel all unsettled contracts involving Tennessee users, and fully refund all deposits.

What happens if they do not comply? The consequences are quite serious. First, they face civil penalties, with fines of up to $25,000 for each violation. More severely, they could be transferred to criminal court for promoting gambling, which is considered a felony under state law. For platforms operating globally, such local regulatory disputes may seem minor, but they reflect the fragmentation of regulation faced by the crypto trading market in the U.S.—federally registered with the CFTC does not automatically mean recognition by individual states.

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PhantomMiner

· 19h ago

Here we go again, even after registering with the CFTC, it still doesn't work. Each state is doing its own thing. Crypto still has to keep getting beaten down; they must exit Tennessee before January 31. If this continues, American users really won't have any place to trade... Compliance is a mess, with each state having its own standards, which is ridiculous. Turning sports betting into gambling—there's no logical problem, but the execution is just annoying. A $25,000 fine isn't a big deal; the real loss is when users are blocked by the state. It feels like regulations are getting stricter and stricter, especially harsh this year.

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