CFTC Gives No-Action Leeway to Polymarket, Gemini, PredictIt, LedgerX Over Data Rules

The U.S. Commodity Futures Buying and selling Fee on Thursday despatched no-action letters to the operators of prediction markets platforms Polymarket, PredictIt, Gemini and LedgerX/MIAX, saying that the businesses won’t have to fulfill sure record-keeping necessities so long as they meet different specified necessities, and that the businesses might be able to clear contracts by means of a third-party clearing member.

The CFTC mentioned in a information launch that the no-action letters imply the regulator won’t pursue any enforcement motion — a lawsuit alleging the businesses violated the legislation — associated to how these corporations adjust to “sure swap-related recordkeeping necessities and for failing to report back to information repositories for alternate information associated to binary choices transactions.”

“The no-action letters apply solely in restricted circumstances and are much like no-action letters issued for different equally located designated contract markets and derivatives clearing organizations,” the CFTC mentioned.

Underneath the no-action letters, issuers should: be certain that their contracts are totally collateralized always, settle their contracts solely by means of their designated platform, publish all information related to the contracts on their platforms after they’ve been executed, and in any other case adjust to sure swap recording necessities.

Prediction markets are a rising sector of the crypto financial system, which dramatically elevated in reputation final 12 months throughout the 2024 elections and as Kalshi, one other prediction market platform, obtained court docket approval to launch election contracts within the US.

Polymarket and Gemini have been working to formally launch (relaunch in Polymarket’s case) prediction market operations within the US, with Gemini receiving CFTC approval earlier this week. Crypto alternate Coinbase can be engaged on launching its personal in-house prediction market platform.

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