On January 11th, a news story drew attention—Tennessee regulators issued bans against several well-known crypto platforms. Kalshi, Polymarket, and Crypto.com were directly ordered to cease providing sports betting prediction services to users in the state, citing that these companies had not obtained operational licenses and had crossed the state's gambling legal boundaries.

The situation is as follows: these platforms are currently registered as designated contract markets with the U.S. Commodity Futures Trading Commission (CFTC), allowing users to buy and sell contracts based on sports event outcomes. From a federal regulatory perspective, they are compliant. However, Tennessee has its own rules—the Sports Wagering Act explicitly states that any institution accepting sports bets must obtain a license from the state government to operate.

Therefore, these three companies now face a clear requirement: completely exit the Tennessee market by January 31st. This includes stopping all business activities, canceling unsettled contracts of Tennessee users, and refunding all funds.

The consequences of violations are also serious. Each violation could result in a fine of $25,000, and severe cases may be deemed as aggravated gambling promotion crimes (which are felonies in the state), potentially leading to criminal prosecution. This shows that the state government is taking a firm stance on this matter.

This incident reflects the current situation faced by cryptocurrency trading platforms in the U.S.—federal regulation and state laws are still being coordinated, and rules across different jurisdictions sometimes even conflict. Platforms need to comply with multiple layers of regulations. For users, it’s also a reminder: even when trading on large platforms, they should pay attention to the specific legal restrictions in their location.