PANews reported on May 20th that, according to The Block, the U.S. Commodity Futures Trading Commission (CFTC) and the Department of Justice have sued the state of Minnesota and its Governor Tim Walz, alleging that the state's newly signed omnibus bill illegally bans prediction markets. The lawsuit, filed less than 24 hours after Walz signed the bill, claims that Minnesota is attempting to regulate federally regulated derivatives markets that fall under its "exclusive jurisdiction," marking the first time the U.S. has imposed a comprehensive ban on prediction markets. The CFTC and the Department of Justice argue that these are federally regulated products and swaps traded on exchanges approved by the CFTC, and the state has no right to criminalize or ban them. This lawsuit is the latest escalation in a jurisdictional conflict between the state's gambling regulator and federally regulated prediction market platforms such as Kalshi and Polymarket. The CFTC has previously sued states including Illinois, Arizona, and Connecticut. Minnesota signed a bill earlier this week allowing banks and credit unions to offer crypto custody services, and in February became the second state, after Indiana, to ban crypto ATMs.