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CFTC warns prediction markets against template-style event certifications
The agency issued the advisory ahead of a July 27 comments deadline on proposed rule changes affecting public interest determinations for certain event contracts.
The US Commodity Futures Trading Commission issued a second warning this year to prediction market operators, telling them not to submit broad, template-style certifications for event contracts. Cointelegraph reports the CFTC said prediction markets should follow existing rules and the statutory framework for self-certification. In a July 24 advisory, the CFTC reiterated that generalized submissions should not be used, after issuing a similar warning on March 12. The regulator said prediction markets can certify event contracts as compliant with the Commodity Exchange Act and related CFTC regulations without prior commission approval, as long as they do so under the applicable self-certification rules. The latest guidance comes days before the CFTC’s July 27 deadline to submit comments on proposed rule amendments tied to public interest determinations for certain event contracts. The proposals would clarify how the agency evaluates whether some contracts are contrary to the public interest. Under the proposed approach, the CFTC would use a three-step analytical framework to assess contracts based on their involvement in enumerated activities, including items such as terrorism, assassination, or gaming. Cointelegraph notes that a law firm highlighted in June that if adopted, the proposals would reshape parts of the regulatory landscape for prediction markets.