CFTC warns prediction markets again over template contracts
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- CFTC issued a Friday advisory warning designated contract markets that "broad, template-style certifications should not be submitted" for event contracts, marking the second such warning in recent months.
- The agency said it needs contract-specific terms, conditions, and analysis of each product's settlement methodology, data sources, and core-principles compliance, but clarified that "closely related event contracts may be certified as a class."
- Prediction market firms including Kalshi, Coinbase, Polymarket, and Crypto.com are named in the article as companies the CFTC has "claimed a role as the leading regulator" of.
- CFTC Chairman Mike Selig has made fighting in state and federal courts to assert sole jurisdiction over event contract platforms an agency priority, while many states pursue the businesses on illegal sports gambling grounds.
- The CFTC's authority over prediction markets remains legally unsettled, with courts — potentially the U.S. Supreme Court — expected to weigh in on the agency's role.
- Kraken Derivatives Exchange received a separate CFTC notice on Friday extending its dormant designation; its last trade was in early 2025, and Kraken cited needing more time after acquiring Bitnomial earlier this year.
Why it matters: Prediction market platforms rely on self-certification to launch event contracts quickly without prior approval — a second CFTC warning in months signals the regulator is running out of patience with the industry's shortcut filings, and the enforcement comes as the agency's own jurisdiction over prediction markets is being challenged in courts by states chasing sports-gambling cases.
