BitGo, Susquehanna Launch OTC Prediction Market Service
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- BitGo and Susquehanna launched an OTC service that gives institutional investors direct access to prediction market contracts, addressing custody, collateral, and execution gaps.
- Kalshi has become a focal point of U.S. legal challenges, with at least 11 states alleging it operates as an unlicensed gambling venue.
- Nevada state court issued a temporary ban on Kalshi on March 20, siding with gaming regulators over unlicensed betting.
- Arizona authorities filed criminal charges against entities linked to Kalshi for allegedly taking wagers on elections and sports in violation of state law.
- Tennessee federal judge blocked a state effort in February to halt Kalshi, ruling its contracts fall under the Commodity Exchange Act and CFTC oversight.
- CFTC released an advance notice of proposed rulemaking on March 12, seeking public input on how to regulate prediction market contracts.
Why it matters: Institutional investors gain a regulated avenue to trade prediction contracts, potentially expanding market liquidity, while platforms such as Kalshi confront heightened state enforcement and a looming CFTC rulemaking, shifting the competitive landscape toward custodial providers like BitGo and may prompt further legal scrutiny of the sector.
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