The Commodity Futures Trading Commission has granted “no-action” letters to a set of prediction markets, exempting them from certain swap data reporting and record-keeping requirements.
The CFTC’s Division of Market Oversight and the Division of Clearing and Risk will not pursue enforcement actions against several prediction market platforms for not adhering to specific recordkeeping mandates, as long as they meet other defined criteria, the agencies announced on Thursday.
“These no-action letters apply only in limited contexts and are similar to no-action letters given to other comparable designated contract markets and derivatives clearing organizations,” they noted.
The firms that were issued a no-action letter include Polymarket US, LedgerX, PredictIt, and Gemini’s prediction market division, Gemini Titan.
To avoid enforcement actions, the platforms must fully collateralize their contracts, ensuring they are backed by reserves, and also publish time and sales data for all event contract transactions on their websites “post-execution,” as per the letters.
Prediction markets and event contracts allow traders to wager on the outcomes of various events, including sports and unique subjects like the fashion choices of public figures.
These contracts impose substantial reporting and record-keeping duties in the U.S., as prediction markets are classified as designated contract markets; however, the no-action letter alleviates immediate enforcement risks if these obligations are unmet.
Related: Gemini surges 14% as new license paves the way for U.S. prediction markets
A no-action letter indicates that CFTC staff will not advocate for enforcement if the requesting entity fails to adhere to certain rules under specific conditions; however, it does not amend existing laws, functioning generally to temporarily mitigate regulatory risk as the market or product develops.
Prediction markets experience a bumper 2025
Prediction markets have become increasingly popular in the crypto landscape this year, with trading volumes on platforms like Kalshi and Polymarket frequently hitting billions.
Kalshi has recorded a trading volume of $5.14 billion in the past 30 days, according to DefiLlama, a DeFi data aggregator. In contrast, Polymarket, which is a cryptocurrency-driven prediction market, has logged $1.9 billion in trading volume over the same period.
Other entities have also begun to enter the sector. Recently, Crypto.com launched a prediction market platform, set to be integrated with Trump Media, while tech researcher Jane Manchun Wong observed on Nov. 19 that website data suggested Coinbase was also working on developing a prediction market platform.
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