Crypto.com Refuses CFTC Request to Halt Sports Predictions Markets

Crypto.com isn’t going to give up its new sports prediction markets without a fight.

The crypto industry giant has rejected a request from the Commodity Futures Trading Commission (CFTC) to halt those markets amid a review. The company scoffed at the request and accused the group of contradicting their own rules with the request.

“It is disappointing that the current and imminently departing CFTC leadership would take this action while not allowing the incoming CFTC leadership to determine how free markets operate under its administration,” a Crypto.com spokesperson said in an emailed statement. “The majority’s decision to apply this rule contradicts recent Federal Court rulings and conflicts with the current Commission’s own statement set forth in its recent rule proposal.”

The statement shows that the company believes that Republicans will not take up this fight when they take power this week. The CFTC will see turnover and could receive an executive order to leave the controversial markets alone.

While many lawmakers are concerned about Crypto.com’s sports prediction markets, it appears Crypto.com feels it is now protected by the new federal government leadership.

How Are Prediction Markets Legal?

Crypto.com’s new sports prediction markets have caught the eye of regulators because of the loophole they use to operate. Instead of betting against the house, customers purchase “contracts” for a team or athlete to win an event. That means they are playing the market, making the offering not legally defined as gambling.

Other industries have arisen by exploiting similar loopholes. However, lawmakers have begun to crack down on them as problem gambling continues to spike. While trading sports contracts may not be gambling, it still allows players to spend far more than they can afford.

Since these markets aren’t considered gambling, they can operate anywhere in the US and are not subject to the regulations and taxation of the US sports betting industry.