The U.S. Commodity Futures Trading Commission issued no-action letters to operators of prediction markets platforms Polymarket, PredictIt, Gemini and LedgerX/MIAX on Thursday, announcing that the companies were not required to meet certain recordkeeping requirements as long as they met other specified requirements, and that they may be able to enter into contracts through a third-party clearing member.
The CFTC said in a press release that the no-action letters mean the regulator will not pursue any enforcement action — a court case alleging the companies violated the law — related to how these companies comply with “certain recordkeeping requirements related to swaps and the failure to report to swap data repositories data associated with binary options transactions.”
“No-action letters apply only in specified circumstances and are comparable to no-action letters issued for other similarly situated designated contract markets and derivatives clearing organizations,” the CFTC said.
According to the no-action letters, issuers must: ensure that their contracts are fully collateralized at all times, clear their contracts only through their designated platform, publish all contract-related data on their platforms after execution, and otherwise comply with certain swap registration requirements.
Prediction markets are a growing sector of the crypto economy, growing significantly in popularity last year during the 2024 election and as Kalshi, another prediction market platform, gained judicial approval to launch election contracts in the United States.
Polymarket and Gemini have been working to officially launch (relaunch in Polymarket’s case) prediction market operations in the United States, with Gemini gaining approval from the CFTC earlier this week. Crypto exchange Coinbase is also working on launching its own in-house prediction market platform.
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