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CFTC warns prediction markets firms against broad template certifications

The CFTC said prediction market contracts, including those self-certified by designated contract markets, need more specific information for each submission, while closely related contracts can be certified as a class.

Reported · Written up by our desk · Regulation

The U.S. Commodity Futures Trading Commission issued an advisory warning prediction markets firms that they have been submitting overly broad, template-style event contract certifications that do not provide enough detail for the regulator to evaluate each product individually, according to CoinDesk.

The CFTC said many designated contract markets continue to self-certify event contracts as broad templates without supplying the terms and conditions of each proposed permutation, along with a concise explanation and analysis tied to the contract’s terms, the underlying commodity, and compliance.

The agency also noted an exception, saying closely related event contracts may be certified as a class when they share consolidated materials and exhibits, rather than treating large sets of events with generalized filings.

CoinDesk said the advisory comes amid rapid growth in event-contract markets, including sports bets and political outcome prediction, and that the CFTC’s role as the primary regulator for prediction markets still faces legal uncertainty that courts, potentially including the U.S. Supreme Court, may resolve.

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