CFTC scrutinizes cryptocurrency derivative contracts

The Commodity Futures Trading Commission (CFTC) has focused its attention on derivative contracts offered on the Crypto.com trading platform for sporting events such as the Super Bowl. This review aims to determine the compliance of these financial products with applicable legal standards. In a statement, the CFTC made it clear that it has asked Crypto.com to temporarily stop trading these contracts, which have been traded since December 23. These measures are being taken during a 90-day evaluation period to determine whether the contracts violate gambling prohibitions. A possible outcome could be a permanent ban on trading. Crypto.com was unimpressed by the regulatory agency's request to suspend trading. A company spokesperson expressed disappointment that the CFTC did not leave the matter to the new administration. The lack of postponement also contradicts recent federal court rulings. Despite current developments, Crypto.com assured its continued cooperation with the CFTC. During the ongoing review process, trading in sports event contracts should continue unchanged in all 50 US states to meet customer needs. The issue of permissible trading types in the area of event-based contracts continuously sparks discussions among regulators. Their scope ranges from general topics such as Grammy winners and weather conditions to politically sensitive issues like election outcomes and legal proceedings. On Friday, a showdown between the CFTC and another prediction market operator, Kalshi, will take place in a federal court. They will argue whether trading in political events is to be classified as gambling.