Federal regulators weigh the compliance of Crypto.com’s sports event contracts amid growing competition in prediction markets.
CFTC Review of Crypto.com Contracts
The Commodity Futures Trading Commission (CFTC) is examining the legality of Crypto.com’s futures contracts that allow users to bet on major football games, including the Super Bowl. The five-member commission is voting on whether to subject these contracts to a 90-day review, which could result in their ban if found non-compliant with gaming laws.
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Rising Competition in Event Markets
Crypto.com’s rapid entry into event prediction markets challenges traditional sportsbooks like FanDuel and DraftKings. Unlike these sportsbooks, Crypto.com’s contracts are accessible nationwide, and its trading model pairs buyers and sellers without taking on payout risks.
Challenges and Delays
Despite following the legal process, Crypto.com’s filing in late December limited the CFTC’s time for review due to the holiday season and potential government shutdown. The contracts, initially labeled as “title event” and “hometown celebration,” aimed to capitalize on the pre-Super Bowl trading window.
Blurred Legal Boundaries
CFTC Chairman Rostin Behnam emphasized the challenges of defining “gaming” in event contracts, noting the fine line between legal and impermissible markets. Behnam’s departure in February 2025 and the incoming Trump administration are expected to influence future regulatory approaches, potentially favoring broader adoption of prediction markets.
The Role of Regulation
Crypto.com’s Chief Legal Officer Nick Lundgren highlighted the benefits of CFTC-regulated markets, including integrity, anti-manipulation controls, and availability across all 50 states. However, regulatory clarity remains crucial as the market for event-based contracts grows.
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