The U.S. Commodity Futures Trading Commission, which has claimed a role as the main regulator of prediction market companies run by companies such as Kalshi, Coinbase, Polymarket and Crypto.com, issued a notice Friday reminding companies that they should not take shortcuts with wide-ranging contract certifications intended to cover a wide range of events.
The agency said “broad, template-type certifications should not be submitted,” marking the second time in recent months that the regulator has had to warn about overly generalized submissions.
Many of the “designated contract markets” regulated by the CFTC “continue to self-certify event contracts” (in other words, prediction market contracts) as broad templates “without providing the terms and conditions of each proposed permutation and a concise explanation and analysis regarding the terms and conditions of the product, the underlying commodity, and product compliance,” the agency said.
The regulator said circumventing the process can undermine its ability to determine whether the company “has provided all required information, explanation and analysis” and has “adequately assessed the settlement methodology, data sources and compliance with the underlying principles of all contract permutations.”
