Prediction Markets Hit $50 Billion, CFTC Steps In With Regulatory Framework
Prediction markets have grown into a significant financial force, with trading volume surpassing $50 billion in June. The growth has drawn major exchanges and Wall Street trading firms into the space, making regulation a pressing issue.
The Commodity Futures Trading Commission (CFTC) has proposed a framework to clarify its authority over prediction markets. The proposal settles the question of when the CFTC can block an event contract from trading by adopting a settlement-based interpretation of the term 'involves.'
HPC and Multicoin Capital have filed a joint comment letter in support of the CFTC's proposal, arguing that written standards provide builders with confidence to invest. They also recommend publishing reasoning for both blocking and allowing contracts.