CFTC's Crackdown on Offshore Crypto Betting Platforms

The United States Commodity Futures Trading Commission (CFTC) is closely monitoring Polymarket and other offshore crypto betting platforms offering derivative contracts to US customers. CFTC Chair Rostin Behnam warned that if an entity's "footprint" in the US is significant enough and it doesn't register the derivatives contracts it offers, enforcement actions will follow, including against exchanges, clearing houses, and brokers.

Scrutiny Over Blockchain-based Prediction Markets

Blockchain-based prediction markets have come under heavy scrutiny in recent months, with their popularity coinciding with bets on the upcoming 2024 presidential election. The CFTC has previously taken action against Polymarket, fining the platform $1.4 million for offering event-based binary options markets without registration.

CFTC's Limited Authority Over Election Betting

However, the CFTC partially lost a recent lawsuit it filed against blockchain prediction platform Kalshi, with the court ruling that the CFTC had "exceeded its statutory authority" by ordering the US-based entity to suspend its election markets. The court found that the CFTC was not authorized to conduct a public interest review and order the suspension of Kalshi's election markets.

Ongoing Regulatory Uncertainty

Despite the court's ruling, Kalshi's election markets were paused again a week later, following a stay order from an appeals court. This uncertainty highlights the ongoing regulatory challenges faced by blockchain-based prediction markets in the US.

Calls for Banning Election Betting

The regulatory scrutiny of crypto betting platforms has intensified, with five US Senators and three House representatives calling for the CFTC to ban presidential election betting altogether.

Source: https://cointelegraph.com/news/cftc-eyes-offshore-firms-that-break-commodities-laws

The information provided in this article is for informational and educational purposes only, based on news and sources gathered from the internet. This content should not be considered as investment advice, financial guidance, or a suggestion to buy or sell any digital assets. Before making any financial decisions, we recommend consulting with a professional financial advisor and conducting your own research. The author and the blog are not responsible for any losses or damages that may arise from using this content.