title: US-MT — Legal & Litigation (W7) | World Payments Monitor canonical: https://payments.gi/jurisdictions/united-states-montana/w7/ ### W7 Legal & Litigation 1 judgment Probable re-verified 2026-10-18 · changed 2026-10-04 Legal/enforcement activity concentrated in State Auditor crypto-fraud prosecutions and DBFI's enforcement register; complaints grew sharply through 2024-2025. Key judgment — Probable · impact ELEVATED Montana's legal exposure framework for prediction-market event-contract providers is paused rather than resolved, pending Ninth Circuit en banc review of a controlling Nevada precedent._claims: wpm-2026-W40-001, wpm-2026-W40-002_ Standing sub-brief · as of 5 July 2026 141 words · last cycle 2026-10-04 #### Legal & Litigation Legal and enforcement activity in Montana's payments-adjacent space is concentrated in the State Auditor's office (Commissioner of Securities and Insurance), which is prosecuting multiple crypto-fraud cases, including an Idaho resident charged in October 2025 for defrauding elderly Montana residents and a Missoula County Ponzi-style crypto case. Digital-asset fraud complaints have grown sharply, from 9 cases totaling over $1 million in 2024 to 20 cases totaling $3.1 million through September 2025 - more than doubling in dollar terms in under a year. This enforcement trajectory sits alongside, and is partly driven by, the state's newly liberalized network-token framework under SB265 (W2) and the unregulated crypto-ATM channel (W10). #### Outlook Expect continued escalation in State Auditor crypto-fraud prosecutions as digital-asset adoption grows under Montana's permissive framework; this trajectory is a direct input into the 2027 crypto-ATM legislative push tracked at W10. Periodic update · new data 2026-10-04 #### Legal & Litigation Montana's dispute with prediction-market platform Kalshi over the regulatory status of event contracts moved through two decisive procedural steps this period. On August 27, 2026, the U.S. District Court for the District of Montana, under Judge Donald W. Molloy, denied Kalshi's motion for a preliminary injunction against Montana gambling officials, finding Kalshi had not shown irreparable harm and specifically noting that Kalshi's repeated agreement to stay the matter for months at a time undermined its ability to make such a showing. That order lifted the existing case stay and set a 21-day response clock for Montana. On September 17, 2026, the parties filed a joint stipulation dismissing Kalshi's suit entirely, with prejudice as to the five members of the Montana Lottery and Sports Wagering Commission and without prejudice as to the Montana Attorney General and the Gambling Control Division. Under the stipulation's terms, Montana agreed not to pursue enforcement against Kalshi's event contracts for as long as Ninth Circuit en banc review of a controlling Nevada ruling remains pending; the pause runs until the Ninth Circuit either denies Kalshi's request for further review or issues an en banc decision, at which point Montana would still owe Kalshi 30 days' notice before resuming enforcement. This sequence matters beyond Montana: it shows a state regulator choosing stipulated forbearance over continued litigation once a federal appellate ruling on preemption became the operative variable, and it establishes a notice-period template (30 days post-ruling) that other states facing similar event-contract disputes may be watched against. The controlling event is Ninth Circuit en banc disposition of the underlying Nevada preemption question; no primary appellate docket confirmation of a review timeline was located this period. Until that ruling issues, Montana's stipulated enforcement pause holds, and the 30-day notice term governs how quickly enforcement exposure could re-emerge for event-contract providers. **1 earlier distinct update(s)** Periodic update · new data 2026-08-11 #### Legal & Litigation Kalshi v. Montana is this cycle's sole legal and litigation development for the jurisdiction. Kalshi's federal suit against Montana tests whether CFTC-regulated event contracts fall outside state gambling and financial-activity jurisdiction altogether, with the litigation reportedly citing Ninth Circuit and Arizona precedent in support of that position, per secondary press coverage; no primary court filing or docket record was independently retrieved this cycle, so this framing sits at Assessed rather than confirmed confidence. The suit follows a 2025 cease-and-desist letter from Montana's state gambling regulator, after which Kalshi's product remained operational without further enforcement action prior to the federal filing. The precedent risk here extends beyond the immediate dispute: if Kalshi prevails on federal preemption grounds, the resulting precedent could extend beyond gambling-adjacent event contracts to broader state authority over CFTC-regulated payment and settlement products operating in Montana, a Low-confidence but High-impact judgment given the novelty of the legal theory and the absence of a comparable precedent already having been tested to conclusion in this jurisdiction. No primary court filing or docket schedule was identified this cycle, so no forward ruling date can be set. The litigation's progression toward any substantive ruling, whether on a motion to dismiss, preliminary injunction, or eventual merits decision, is the clearest single marker to watch for this jurisdiction's legal and litigation profile. **Sources and findings (3 unique sources · R-3/R-4)** 1. [W7-E1] T3 Derived: Probable in_force [Collapsed 2× uses https://www.thebulldog.law/montana-s-financial-freedom-and-innovation-act-legal-guide-for-digital-asset-companies](https://www.thebulldog.law/montana-s-financial-freedom-and-innovation-act-legal-guide-for-digital-asset-companies) re-verified 2026-07-05 In October 2025, the State Auditor's office announced charges against an Idaho resident for defrauding investors, including elderly Montana residents, through a fraudulent cryptocurrency scheme involving a purported $1 million+ fund, with six felony counts covering elder exploitation, securities fraud, an illegal pyramid promotional scheme, and unlicensed securities dealing. 2. [W7-E3] T1 Derived: Confirmed [in_force https://banking.mt.gov/Enforcement_Actions/Division_Enforcement_Actions](https://banking.mt.gov/Enforcement_Actions/Division_Enforcement_Actions) re-verified 2026-07-05 The Division of Banking and Financial Institutions maintains a public register of enforcement actions from 1998 to present against regulated banks and licensees, with older non-depository licensee actions cross-referenced on the NMLS Consumer Access website. 3. [W7-E4] T2 Derived: Confirmed [in_force https://nbcmontana.com/news/local/montana-state-auditor-warns-of-uptick-in-crypto-atm-scams](https://nbcmontana.com/news/local/montana-state-auditor-warns-of-uptick-in-crypto-atm-scams) re-verified 2026-07-05 The State Auditor's office is currently prosecuting a Missoula County case against an individual who created a crypto investment business that took investor funds while showing fabricated profit statements, characterized by the office as another form of Ponzi scheme.