CFTC issues blanket no-action letter on prediction markets, relieving swap data reporting duties

The Commodity Futures Trading Commission (CFTC) has issued a blanket no-action letter, effectively exempting prediction market platforms from swap data reporting and recordkeeping obligations. This decision, announced by the CFTC's Division of Market Oversight and Division of Clearing and Risk, means the agency will not pursue enforcement actions against designated contract markets (DCMs) and clearinghouses for non-compliance with these requirements. The move aims to reduce regulatory uncertainty for platforms offering event contracts, which technically fall under the definition of "swaps" due to their binary outcomes. The CFTC acknowledges that these contracts share characteristics with futures and options and will now allow for direct reporting to the Commission in a format similar to that for futures and options. The letter currently names 19 beneficiaries, including Polymarket US, Kalshi, Gemini Titan, and Bitnomial, and allows other entities to request similar relief. This action comes amidst ongoing jurisdictional disputes between federal and state authorities over the regulation of prediction markets, with the CFTC asserting its authority over these derivatives markets.

(Source：The Block)