The Commodity Futures Trading Commission has issued “no-action” letters to a gaggle of prediction markets, exempting them from swap data reporting and record-keeping requirements.
The CFTC's Division of Market Oversight and Division of Clearing and Risk is not going to take enforcement motion against several prediction market platforms for evading certain record-keeping requirements so long as they meet other specific requirements, the authorities said in an announcement Thursday.
“The no-action letters apply only in certain circumstances and are comparable to no-action letters issued to other similarly situated designated contract markets and derivatives clearing organizations,” they added.
The corporations that received a no-action letter are Polymarket US, LedgerX, PredictIt and Gemini Titan, the prediction market arm of crypto exchange Gemini.
Source: CFTC
As a part of the necessities to avoid enforcement, platforms must fully collateralize all of their contracts by ensuring they’re fully backed by assets held in reserve, and likewise publish timing and revenue data for all event contract transactions on their web sites “after the transactions have been executed,” the letters said.
Prediction markets and event contracts allow traders to take a position on the consequence of varied events, including sporting events and unconventional topics comparable to political figures' clothing decisions.
These contracts trigger extensive reporting and recordkeeping requirements within the United States because prediction markets are regulated as designated contract markets; However, the No Action Letter now frees them from the danger of immediate enforcement risk if these obligations aren’t met.
A no-action letter implies that CFTC staff is not going to recommend enforcement if the requesting party fails to comply with certain regulations under very specific conditions. However, this doesn’t change the law they usually are generally used to temporarily reduce regulatory risk while the market or product develops.
Prediction markets reach record surge for 2025
Prediction markets have turn out to be one of the popular crypto offerings this 12 months, with trading volumes on platforms like Kalshi and Polymarket commonly seeing billions of transactions.
According to DeFi data aggregator DefiLlama, Kalshi had a trading volume of $5.14 billion within the last 30 days. In comparison, Polymarket, a cryptocurrency-based prediction market, recorded $1.9 billion in trading volume over the past 30 days.
Crypto.com recently began offering a prediction market platform to be integrated into Trump Media, while technology researcher Jane Manchun Wong said on November 19 that site data suggests Coinbase can also be working on making a prediction market platform.
