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The CFTC is considering probes on sports betting event contracts offered by Crypto.com weeks out from the popular Super Bowl match, Bloomberg reports.
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The US Commodity Futures Trading Commission is reportedly deliberating on whether it should look into the legality of Crypto.com’s futures contracts allowing bets on football matches, including the upcoming Super Bowl.
The five CFTC Commissioners are voting on whether to pull the contracts into a 90-day review to determine if they violate gaming laws, Bloomberg reported on Jan. 14, citing people familiar with the matter.
The agency can’t immediately stop the trading of the contracts, and any review would wrap up after the Super Bowl on Feb. 9 — but the CFTC could ban the contracts after that.
Crypto.com, which operates a US-based derivatives exchange, followed the legal procedures to alert the CFTC on Dec. 19 that it would start trading the contracts on Dec. 23.
The agency, however, didn’t have time to review them before the Christmas season alongside a looming threat of a government shutdown at the time, Bloomberg reported.
The reported potential probe comes amid the CFTC’s battle to regulate so-called event contracts that allow punters to bet on anything from sports to what specific words politicians might say in major speeches. They became popularized by decentralized betting markets such as Polymarket, which says it makes itself unavailable in the US.
The agency has appealed its court loss against betting market provider Kalshi over contracts it offered for the 2024 US elections, claiming they fall under gaming laws. A Crypto.com spokesperson told Bloomberg that the CFTC’s loss gave the firm general legal clarity for event contracts.
A Crypto.com spokesperson told Cointelegraph that the firm hasn’t been notified of any CFTC action and added, “It is disappointing that the current and imminently departing CFTC leadership would consider this action while not allowing the incoming CFTC leadership to determine how free markets operate under its administration.”
Related: Singapore blocks access to Polymarket over unlicensed gambling concerns
The contracts offered by Crypto.com give users options to wager on the results of college football and National Football League games, including the Super Bowl — the championship game of the latter competition that is one of the world’s most widely watched sporting events.
Users are limited to 2,500 contracts, each listed at $100, while the platform’s market makers can hold up to 250,000 contracts.
An example of a social media ad promoting Crypto.com’s sports bets that doesn’t mention the competitions by name due to trademark laws. Source: Crypto.com
The CFTC did not respond to Cointelegraph’s request for comment.
CFTC chair Rostin Behnam will step down on Jan. 20 when Trump takes office, and the incoming president hasn’t named his replacement pick but reportedly favors the pro-crypto CFTC Commissioner Summer Mersinger to lead the agency.
Magazine: Crypto has 4 years to grow so big ‘no one can shut it down’ — Kain Warwick, Infinex
This article first appeared at Cointelegraph.com News
