- The CFTC has simplified the reporting requirements for swaps on event contracts for prediction markets.
- The decision comes amid state-level litigation.
Staff of the U.S. Commodity Futures Trading Commission (CFTC) released A no-action letter that effectively waives swap data reporting and recordkeeping requirements for prediction market platforms.
This means that staff will not recommend enforcement actions against companies providing derivatives trading services. This will also apply to companies providing clearing services and market participants for failure to comply with certain swap reporting rules, provided they comply with the conditions set out in the internal letter. The agency also stated that this approach responds to numerous requests from companies involved in the listing and clearing of event contracts.
This position paper is in response to numerous requests from digital currency companies and organizations working with digital currencies to list and clarify the terms of event contracts.
The divisions intend to use today’s no-action position to streamline the process for reviewing such requests and ensure a consistent approach across market participants, says in the statement.
Currently, the list of beneficiaries includes 19 companies, including polymarket US, Kalshi, Gemini Titan and Bitnomial. The Commodity Futures Trading Commission added that organizations wishing to list event-based contracts may submit a waiver.
This decision was made against the backdrop of legal proceedings At the state level, the Commodity Futures Trading Commission supported prediction markets and challenged the actions of state authorities in Arizona, Connecticut, Illinois, New York, and Wisconsin.
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