Deniz 
From Gemini and Crypto.com to Robinhood and powerful blogger Scott Alexander, several business executives across crypto and fintech have expressed their opposition to a proposed regulatory change that would see political prediction markets prohibited in the United States.
Elizabeth Warren and other Democrats have lately pushed the U.S. Commodity Futures Trading Commission (CFTC) to finalize a rule clarifying that prohibited so-called “event contracts” include “staking or risking something of value on the outcome of a political contest, an awards contest, or a game in which one or more athletes compete, so banishing such contracts from trading by CFTC-registered entities.”
“As we approach the 2024 election, voters already face a political system that allows the richest individuals and corporations to funnel dark money into campaigns without disclosure,” the legislators stated in the letter. “The U.S. remains a target for foreign players who have tried to influence our elections; the threat of violence and extremism is great. Voters on their way to the polls seldom need bets on the result of that election.”
Stakeholders in the crypto and fintech sectors, which have lately warmed to prediction markets, have openly opposed the planned rule change. Gemini co-founder Cameron Winklevoss joined Coinbase’s remark on X, stating, “Rather than forging ahead and denying Americans access to these powerful markets, the CFTC should withdraw this Proposed Rule and go back to the drawing board with industry stakeholders. This would be the trust-building move.”
Concerns Over Regulatory Overreach
Ethereum.com Steve Humenik, SVP, also offered a remark that the CFTC shouldn’t overuse its power. “Congress had the ability to draft much more simply ‘the following types of event contracts are prohibited,’ but it did not,” his letter notes.
Likewise, associate general counsels Jessica Furr and Bryan Edelman of crypto VC Dragonfly Capital stated in their submission that the Supreme Court’s revocation of the Chevron doctrine indicates the CFTC has to make sure it can defend its power to control these contracts.
“The CFTC is neither a gambling nor an election regulator and is not equipped to regulate this market; whether the CFTC has jurisdiction over election events contracts requires a court’s determination,” they said.
Other voices expressing disapproval included Robinhood, prominent blogger Scott Alexander of the Astral Codex Ten Substack, and the creator of popular election odds aggregator ElectionBettingOdds.com.
You can also freely share your thoughts and comments about the topic in the comment section. Additionally, don’t forget to follow us on our Telegram, YouTube, and Twitter channels for the latest news and updates.