The U.S. Commodity Futures Trading Commission on Thursday issued no-action letters to operators of prediction market platforms Polymarket, PredictIt, Gemini and LedgerX/MIAX, announcing that the firms did not have to meet certain recordkeeping demands as long as they met other specific requirements, and that the firms could settle contracts through a third-party clearing member.
The CFTC said in a press release that the no-action letters mean the regulator will not pursue any enforcement action (a court case alleging the companies violated the law) tied to how these companies comply with “certain swap-related recordkeeping requirements and for failing to report data associated with binary options transactions to swap data repositories.”
“No-action letters apply only in specific circumstances and are comparable to no-action letters issued to other designated contract markets and derivatives clearing organizations in similar situations,” the CFTC said.
Under the no-action letters, issuers must: ensure that their contracts are fully collateralized at all times, settle their contracts only through their designated platform, publish all data linked to the contracts on their platforms after their execution, and comply with certain swap registration requirements.
Prediction markets are a growing sector of the crypto economy, whose popularity increased dramatically last year during the 2024 election and when Kalshi, another prediction market platform, gained court approval to launch election contracts in the US.
Polymarket and Gemini have been working to formally launch (relaunch in Polymarket’s case) prediction market operations in the US, with Gemini gaining approval from the CFTC earlier this week. Cryptocurrency exchange Coinbase is also working on launching its own internal prediction market platform.
Read more: Most influential: Shayne Coplan
