Michaela
The Commodity Futures Trading Commission (CFTC) has reportedly begun an investigation into the legality of Crypto.com futures contracts, which permit users to place wagers on football games, including the highly anticipated Super Bowl.
Bloomberg reports that the CFTC is holding a vote among its five commissioners to decide whether to initiate a 90-day review of Crypto.comās futures contracts. The review would assess whether these contracts, which allow betting on football games, violate federal gaming laws, according to sources familiar with the situation.
The regulatory agency has not yet decided whether the contracts listed Š¾n Crypto.com’s Chicago-based derivatives exchange breach laws related to betting agreements. The CFTC has historically opposed such contracts that allow investors to wager on outcomes of sports events, wars, assassinations, or other activities deemed contrary to public interest.
Moreover, the CFTC cannot halt trading right away, and any review process would likely extend beyond the Super Bowl on February 9. However, the agency could impose a ban on the contracts following the event.
Crypto.com notified the CFTC on Dec. 19, 2024 of its planned launch of sports contracts, which was just twŠ¾ days before Christmas. The exchange officially announced the release of these contracts on January 7.
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Due to the timing of the submission, the agency was unable to review the documents before the holiday break.
A spokesperson for Crypto.com explained that while the company initially intended to delay the launch of its new product, it proceeded with the rollout earlier than planned. The decision was made out of concern that a potential government shutdown could delay regulatory reviews and cause the firm to miss trading opportunities tied to the Super Bowl, Bloomberg reported.
The potential investigation coincides with the CFTC’s ongoing effŠ¾rts to regulate event contracts, which enable individuals to place bets on a wide range of outcomes, from sports events to the specific words politicians might use in major speeches. These types of contracts gained traction through decentralized betting platforms like Polymarket, which has since restricted access to users in the United States.
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Crypto.com’s newly introduced sports contracts do not directly reference specific games by their official names on the platform’s website or social media. Instead, they use general terms such as āBowl games,ā āPro Football Conference Championships,ā and āCollŠµge Football Championships.ā However, the app still features the official names of the matches and allows users aged 18 years and older to place bets on events like the AFC Championship or the Super Bowl.
As the debate over the regulation of event contracts continues, the potential shift in the CFTCās approach to crypto regulation may be shaped by upcoming changes in leadership following Chairman Rostin Behnamās departure. This transition could influence how the agency addresses the evolving crypto landscape and its stance on emerging products like Crypto.comās sports contracts.
With a new administration and CFTC chair poised to take office, there is speculation about how the regulatory approach to cryptocurrencies and event contracts might evolve.
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MICHAELA
Michaela is a news writer focused on cryptocurrency and blockchain topics. She prioritizes rigorous research and accuracy to uncover interesting angles and ensure engaging reporting. A lifelong book lover, she applies her passion for reading to deeply explore the constantly evolving crypto world.
