Prediction Businesses to be Reviewed by the CFTC in the Public Roundtable

In the upcoming months, the U.S. Commodity Futures Trading Commission may hold a common roundtable to review its regulatory framework for prediction markets, which might affect programs like Kalshi and Polymarket.

The roundtable may follow the company’s request for information on sports-related event arrangements and is intended to gather insight from market participants, legal experts, and business stakeholders. &nbsp,

According to a speech on Wednesday, debate will examine the propriety of celebration contracts under the Commodity Exchange Act, consumer safety concerns, and possible governmental changes.

Acting Chairman Caroline D. Pham criticized the committee’s previous attitude, calling it a” hole of constitutional doubt” that has hindered technology, per the statement.

Kalshi, a CFTC-regulated designated deal industry, has faced regulation obstacles, including the company’s decision to stop its proposal for election-related contracts in 2023. Polymarket, which operates on Ethereum, was fined$ 1.4 million in 2022 for offering unlicensed transfers.

Common-sense view

Under Biden, the CFTC stepped up enforcement of event arrangements and unregulated websites, according to Pham, while former Chair Rostin Behnam increased monitoring of bitcoin derivatives and DeFi.

Pham reacted by saying that the CFTC must maintain oversight while adopting a forward-thinking strategy to protect consumers from fraud and abusive practices.

” Unfortunately, the undue delay and anti-innovation policies of the past several years have severely restricted the CFTC’s ability to pivot to common-sense regulation of prediction markets”, she said.

Crystal ball

Polymarket saw significant trading volume during the 2024 U.S. presidential election cycle, with traders using it to monitor the likelihood of Donald Trump winning the Republican nomination and a subsequent presidential victory on November 5.

Polymarket became a key barometer of sentiment throughout the Trump campaign, with traders responding rapidly to shifts in polling data, legal proceedings, and key endorsements.

The company’s CEO, Shayne Coplan, was later targeted in a law enforcement raid on November 14, with authorities seizing his phone and electronics.

The decision to Decrypt was described as “political retribution,” according to a spokesperson at the time, claiming Coplan was being targeted after Polymarket users had correctly predicted Trump’s victory.

Pham sees prediction markets as a “new frontier” for utilizing market sentiment to predict events and increase information accuracy in the digital age, with Trump now in office.

The roundtable will take place at the CFTC’s headquarters in Washington, D. C., with further details to be announced. By February 21, the regulator said, public comments and participation requests are due.