YEREVAN (CoinChapter.com) — The Commodity Futures Trading Commission (CFTC) has scheduled a public roundtable to discuss the regulation of prediction markets, focusing on platforms like Kalshi and Polymarket. This follows the agency’s request for information on event contracts, signaling a potential shift in oversight.
CFTC Chair Calls for Clearer Regulation
Acting CFTC Chair Caroline Pham, who took over after Rostin Behnam’s resignation, has been critical of past policies. She described them as creating legal uncertainty and blocking market development.
According to the CFTC’s announcement, the roundtable will cover the legal status of event contracts under the Commodity Exchange Act, along with consumer protection measures and potential regulatory adjustments.
CFTC Roundtable Announcement. Source: Commodity Futures Trading Commission“The delay and restrictive policies of the past years have limited the CFTC’s ability to establish clear rules for prediction markets,”
Pham stated.
The roundtable will take place at CFTC headquarters in Washington, D.C., allowing industry stakeholders to provide input. The commission has set Feb. 21 as the deadline for public comments and participation requests.
Regulatory Scrutiny on Kalshi and Polymarket
This roundtable follows CFTC actions targeting event contracts and unregistered platforms under the Biden administration. Former chair Rostin Behnam increased oversight of crypto derivatives and decentralized finance (DeFi).
Kalshi, a CFTC-regulated designated contract market, has faced barriers to offering election-related contracts. The commission rejected its proposal, citing regulatory risks. Meanwhile, Polymarket, a blockchain-based prediction platform, was fined $1.4 million for operating without proper registration.
The impact on the market has been significant. After CFTC actions against Kalshi five months ago, Polymarket’s trading volume dropped by 40%.
Polymarket Daily Volume, Daily Active Traders. Source: DuneCFTC Investigations Extend to Crypto and Sports Betting
The CFTC’s enforcement efforts have expanded beyond prediction markets. Four weeks ago, the agency issued a subpoena to Coinbase as part of an investigation into Polymarket. The FBI later seized electronics belonging to Polymarket CEO Shayne Coplan following increased scrutiny of election-related betting.
The commission has also taken action against sports betting contracts. Crypto.com’s Super Bowl contracts are under review, while Robinhood was forced to halt its Super Bowl betting offerings.
Geoff Zochodne, a sports betting journalist, commented on the regulatory complexity.
“The CFTC says it has identified key obstacles to balanced regulation, but the list suggests they are addressing a broad range of issues,”
Zochodne stated.
CFTC Challenges in Prediction Markets. Source: Geoff ZochodneVitalik Buterin Defends Prediction Markets
Despite increased regulatory enforcement, Ethereum co-founder Vitalik Buterin has supported prediction markets, arguing they serve an informational role rather than gambling.
“Prediction markets act as a tool for understanding public expectations about events and their possible outcomes,”
Buterin wrote.
Vitalik Buterin on Polymarket. Source: Vitalik.ethGlobal Authorities Target Crypto-Based Prediction Markets
Moreover, regulatory pressure on prediction markets is growing worldwide. Authorities in Thailand, Singapore, and France have taken steps against Polymarket, citing concerns over crypto-based betting.
Meanwhile, the CFTC is also planning a roundtable on crypto market structure, showing a broader effort to gather industry input. The results of these discussions could affect the regulatory landscape for both prediction markets and digital assets.
The post CFTC Launches High-Stakes Roundtable on Prediction Markets Regulation first appeared on Coinchapter.
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