CFTC No-Action Letters Ease Rules for Prediction Markets
The Commodity Futures Trading Commission has issued no-action letters to a number of prediction market operators, granting limited relief from certain swap data reporting and recordkeeping requirements under specified conditions, the agency said on Thursday.
The Division of Market Oversight and the Division of Clearing and Risk said they will not recommend enforcement actions against the platforms for noncompliance with select recordkeeping obligations if the firms meet alternative terms. The staff noted the relief is narrowly tailored and consistent with prior no-action positions provided to similarly situated designated contract markets and derivatives clearing organizations.
The letters were issued to Polymarket US, LedgerX, PredictIt, and Gemini Titan, the prediction markets unit of crypto exchange Gemini.
Under the conditions of the relief, the platforms must fully collateralize all contracts with assets held in reserve and publish time-and-sales data for all event contract transactions on their websites after execution, according to the letters.
Prediction markets and event contracts allow participants to trade on outcomes of various events, from sports to other topics. In the United States, these markets are regulated as designated contract markets, which carry extensive reporting and recordkeeping obligations. The no-action letters reduce immediate enforcement risk for certain obligations when the specified conditions are satisfied.
A no-action letter indicates CFTC staff will not recommend enforcement if the requester does not fully comply with particular regulations under narrowly defined terms. It does not change the law and is typically used to temporarily lessen regulatory risk as a market or product evolves.
Prediction markets report robust 2025 activity
Prediction markets have been among the more active crypto offerings this year, with platforms such as Kalshi and Polymarket regularly posting billions in trading volume. Over the last 30 days, Kalshi recorded $5.14 billion in trading volume, according to DeFi data aggregator DefiLlama. Polymarket, a cryptocurrency-based prediction market, reported $1.9 billion over the same period.
Additional firms are entering the space. Crypto.com recently launched a prediction market platform slated for integration with Trump Media, while on Nov. 19, tech researcher Jane Manchun Wong said website data indicated Coinbase was developing a prediction market platform.
Stay informed, read the latest news right now!
Disclaimer
The content on TrustsCrypto.com is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency markets are highly volatile, always do your own research before making decisions.
Some content may be assisted by AI and reviewed by our editorial team, but accuracy is not guaranteed. TrustsCrypto.com is not responsible for any losses resulting from the use of information provided.
