Phantom, the self-custody crypto wallet and trading app with more than 20 million users, began rolling out Phantom prediction markets to eligible US users on 28 October 2026 through its first US integration with Kalshi, the CFTC-registered exchange, offering contracts on sports, politics, the economy and crypto prices that settle as often as every 15 minutes, according to the launch announcement. Fintechbits read CFTC Staff Letter 26-09 in full, and it requires Phantom and each exchange partner, in this case Kalshi, to sign an undertaking agreeing to be “jointly and severally liable” for any violations by Phantom or its personnel.

Kalshi’s Max Crowley says in the announcement that “Phantom did the regulatory work up front”, but the announcement does not say what that work commits Kalshi to.

How Phantom prediction markets work

Phantom prediction markets live in a new Predict tab. A user completes Kalshi’s standard onboarding, then places trades that Phantom says work like a token swap, funded from a Phantom Cash balance held in CASH, a stablecoin built on Bridge and Stripe’s Open Issuance platform. Cash-outs return to the same balance. Users who already hold a Kalshi account can link it and skip verification, and users verified with Phantom’s other regulated partners can share those details with Kalshi.

Kalshi does the regulated work behind Phantom prediction markets. It carries out customer diligence, approves and holds the trading accounts and executes the trades users submit through Phantom. Phantom adds market chat, live scores and real-time prices. Kalshi’s state-level restrictions apply by category, so some markets will not appear in every state.

The contract menu leans hard on speed. Crypto up/down markets settle every 15 minutes, alongside professional and college sports and markets on economics, politics and AI.

What CFTC Staff Letter 26-09 actually requires

The CFTC letter, signed on 17 March 2026 by Thomas J. Smith, acting director of the Market Participants Division, says staff will not recommend enforcement against Phantom for failing to register as an introducing broker. It comes with ten conditions, and several shape how Phantom prediction markets can grow.

Users must be onboarded as direct members of the exchange and keep the ability to reach it without Phantom. Phantom must follow NFA rules on communications with the public as if it were a registered introducing broker, and it may not run advertising or promotions that would need NFA pre-approval under Compliance Rule 2-29. Phantom must also give users disclosures on its relationship with each partner, “including fees”.

The liability clause carries the most weight. Phantom and each partner agree to be jointly and severally liable for violations by Phantom or its staff when acting for that partner, and both consent to CFTC jurisdiction. The letter states that it binds only the division that issued it, not the full Commission, and that staff can modify or end the position at their discretion.

Fintechbits analysis

Why the Kalshi liability clause matters most

Distribution is the fight in US prediction markets. Kalshi already reaches users through brokers and apps, and it has been adding products for professional traders, such as the crypto margining network with BitGo covered on 26 October, and new entrants such as Lumina Markets, which Fintechbits covered on 21 October, route to rival exchanges. Phantom gives Kalshi access to a large, crypto-native user base that already trades short-dated risk. That is a natural fit, and 15-minute Bitcoin contracts are the part of Phantom prediction markets most likely to get used.

The CFTC letter shows what this model costs. Kalshi acts as a co-signer here as well as a venue. Any marketing slip in Phantom prediction markets becomes Kalshi’s problem too, which gives Kalshi strong reasons to police Phantom’s promotions closely. The ban on promotions that would need NFA pre-approval also limits the growth tactics crypto apps usually rely on, such as sign-up bonuses and influencer campaigns.

The arrangement is also fragile. A staff no-action letter can be withdrawn, and sports event contracts remain contested at state level. Phantom prediction markets are built on two layers of permission, the CFTC staff’s and the states’, and either could narrow. Phantom has done the paperwork properly, but its position depends on permission that others can take back.

Frequently asked questions

Who runs Phantom prediction markets?

Kalshi, a CFTC-registered exchange, runs Phantom prediction markets. It handles customer diligence, holds the accounts and executes trades, while Phantom provides the app interface and funding from Phantom Cash, according to the launch announcement.

Is Phantom registered with the CFTC?

No. Phantom operates under a staff no-action position in CFTC Letter 26-09, which relieves it from introducing broker registration if it meets ten conditions. The letter binds only the issuing division and can be modified or withdrawn.

Are all prediction markets available in every US state?

No. Kalshi’s state-level restrictions apply by market category, so some contracts, sports among them, may not be offered in certain states.

What to Watch Next

Watch whether the CFTC turns staff letters like 26-09 into a formal rule for wallet and app distributors, which would give the model a firmer legal footing. On the commercial side, the signal is whether Kalshi signs other self-custody wallets on the same joint-liability terms. If it does, Phantom prediction markets will have set the template for how crypto apps distribute regulated event contracts in the US.