The US commodities regulator is currently conducting an investigation into the Super Bowl markets offered by Crypto.com and, according to reports, Kalshi. The regulator is inquiring as to how these markets adhere to derivatives regulations.
Exchange of cryptocurrency Crypto.com has announced that it will continue to provide wagering on the Super Bowl while it collaborates with the US commodities regulator to resolve its concerns.
Bloomberg reported on February 4 that the US Commodity Futures Trading Commission requested an explanation from Crypto.com and predictions market Kalshi regarding the compliance of their Super Bowl events contracts with derivatives regulations.
On December 19, Crypto.com, which maintains a derivatives exchange in the United States, informed the CFTC that it would commence transacting the contracts on December 23.
Nevertheless, Bloomberg reported at the time that the CFTC was unable to evaluate them prior to the Christmas season due to the imminent prospect of a government closure.
“We are confident in the constitutionality of our events contracts and believe that the CFTC is the appropriate regulator to implement federally regulated market integrity, manipulation controls, and product availability in all 50 states,” Crypto.com stated in an interview with Cointelegraph.
“We will persist in providing these contracts as we collaborate with the CFTC.” Bloomberg reported that a CFTC spokesperson was also examining comparable events contracts from Kalshi, a prediction markets platform.
The commission, which is currently under the leadership of Caroline Pham, is unable to promptly suspend the trading of the Crypto.com and Kalshi’s Super Bowl event contracts. This is due to the fact that any investigation must be complete within 90 days, and the Super Bowl will have concluded by February 9.
The most recent development is a follow-up to the new CFTC leadership’s announcement on January 27 that it would conduct a thorough examination of emergent issues in the derivatives market.
Firms that “self-certify” their financial products are required to provide additional information to the CFTC in order to demonstrate that the products are not susceptible to manipulation and comply with derivatives regulation. This is a legal right. Subsequently, the CFTC determines whether enforcement action is required.
There was no immediate response from Kalshi when Cointelegraph contacted him. On January 24, Kalshi introduced its “Kansas City vs. Philadelphia Football” who-will-win Super Bowl market, which has generated a trading volume exceeding $2.4 million.
Kalshi is also enabling bettors to speculate on which companies will run advertisements during the Super Bowl, a feature that has generated nearly $1.5 million in trading volume.
It is the result of Robinhood Derivatives’ announcement on February 3 that certain traders can now place bets on the Super Bowl through its partnership with Kalshi.
Prediction markets enable merchants from all over the world to place bets on a wide range of topics, including the number of X posts that multibillionaire Elon Musk will make in a single week and sports.
Polymarket, which witnessed over $3.6 billion in wagers placed on the US election last November, is among the numerous prediction markets that incorporate blockchain technology.
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