CFTC issues advisory on prediction markets as event contracts expand
The CFTC issued guidance for exchanges listing event contracts, balancing innovation with regulatory compliance in the growing prediction market sector.Summary
The Commodity Futures Trading Commission (CFTC) has released an advisory regarding prediction markets, specifically addressing the rapid growth of event contracts across various trading platforms. The guidance, issued by the Division of Market Oversight, reminds exchanges of their regulatory obligations under the Commodity Exchange Act, covering product submission rules and core market integrity principles. The CFTC aims to foster innovation while ensuring adherence to existing regulations. The advisory specifically notes the increasing popularity of sports-related event contracts. This shift in regulatory tone is a departure from previous administrations, with current Chairman Michael S. Selig adopting a more permissive approach. Platforms like Kalshi and Polymarket have been instrumental in this expansion, further accelerated by a 2024 court ruling allowing contracts tied to the US presidential election. Recent developments include Crypto.com launching sports prediction markets and Polymarket obtaining licenses for a regulated US exchange, with political figures like Donald Trump Jr. becoming involved as advisors.
(Source：Crypto Briefing)