Crypto.com has chosen to defy the US CFTC regarding the suspension of its newly launched sports contract trading.
Crypto.com, a prominent player in the crypto space, has taken a bold stance against the Commodity Futures Trading Commission (CFTC).
As reported by Bloomberg, the trading platform has refused the agency’s request to suspend all its trading of sports-related contracts across 50 States in the US This rejection sets the stage for a significant regulatory showdown that could define the future of event-based trading in the United States.
The CFTC recently called on Crypto.com to pause trading on its sports contracts for a 90-day review. Sports contracts allow investors to predict the outcomes of major events such as Super Bowl games.
The agency is considering whether these contracts are like traditional betting or speculative trading. The CFTC said it needs a review to ensure the contracts follow US laws. The regulator threatened to ban them if they were non-compliant.
The CFTC issued the request as part of its efforts to regulate derivatives and event-based contracts, which include sports wagers. Reportedly, the CFTC’s actions are part of a broader issue with betting markets, which regulators have often opposed.
Crypto.com quickly rejected the CFTC’s request. The exchange clarified that trading on its sports event contracts will continue in all 50 states without interruption. Also, a spokesperson for the company criticized the CFTC’s approach.
It was stated that this approach conflicts with the pro-business stance of the incoming presidency. This is because Donald Trump’s administration has supported innovation in digital assets and trading platforms.
Initially, the exchange informed the CFTC of its plans to launch sports contracts before its release. However, just two days before Christmas, the launch timing left the commission with little time to conduct its review.
Some critics believe Crypto.com’s timing was planned to take advantage of the holiday rush and avoid quick regulatory challenges.
This is not the first time the CFTC has tightened its grip on betting markets. In December, the agency ordered the suspension of contracts on platforms like Kalshi. The platform allowed users to speculate on high-profile events, including the legal fate of UnitedHealthcare CEO Brian Thompson’s alleged assassin.
Similarly, platforms like Polymarket have faced restrictions, offering event contracts that exclude US-based users to avoid regulatory backlash. Meanwhile, prediction markets like Iowa Electronic Markets (IEM) have worked legally in academic and research settings.
However, broader commercial uses have faced regulatory challenges. The CFTC has historically taken a cautious stance, arguing that these contracts may encourage speculative behavior detrimental to the public good.
Notably, the agency’s tough stance against prediction markets has raised an uproar from industry participants, including Coinbase. Despite the regulatory challenges, Crypto.com is betting on the growing demand for new trading products by letting users trade sports event contracts.
This could set a legal precedent if it wins, encouraging other platforms to follow suit. However, if the CFTC rules prevail, stricter regulations could slow down innovation in the prediction offshoot of the crypto industry.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
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Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.
