The U.S. Commodity Futures Trading Commission (CFTC) Chair Mike Selig introduced that the CFTC has filed an amicus curiae transient to defend its jurisdiction over prediction markets corresponding to Polymarket and Kalshi. This follows the regulatory crackdown from state regulators, who alleged that these platforms are working as unlicensed sports activities betting platforms.
CFTC Contests State Regulators’ Efforts To Crack Down On Prediction Markets
In an X post, Selig acknowledged that they’ve filed a ‘friend of the court’ transient to defend their jurisdiction over Polymarket, Kalshi, and different prediction markets. This got here as he famous that over the past 12 months, American prediction markets have confronted an “onslaught” of state-led litigation, prompting the Commission to file this movement.
The CFTC chair additional acknowledged that prediction markets aren’t new and that the Commission has regulated them for over twenty years. He added that these markets present a “useful function” for society by enabling Americans to hedge towards industrial dangers and that additionally they function an necessary examine on our information media and data streams.
CoinGape reported earlier that prediction markets corresponding to Polymarket and Kalshi had been dealing with a regulatory crackdown from state authorities over their sports activities prediction choices. Prior to this transfer by the Commission, Polymarket had already sued Massachusetts, arguing that it falls beneath the CFTC’s jurisdiction moderately than state regulators.
It is price noting that prediction markets function as derivatives markets, which is why they fall beneath the Commission’s jurisdiction. However, states like Massachusetts argue that the sports activities markets imply that these platforms are working unlicensed sports activities betting platforms.
These state regulators have additionally moved to crack down on top crypto exchanges Coinbase and Crypto.com, which additionally provide prediction markets. Coinbase CEO Brian Armstrong warned that such a transfer from these state regulators would hinder innovation within the U.S.
As a ‘friend of the court,’ the CFTC would have the ability to present helpful data and authorized arguments that may affect the courtroom’s resolution. A possible resolution on this case may very well be important, because it might affect the huge traction that these markets are at present recording.
