The U.S. Commodity Futures Trading Commission (CFTC) is reportedly deliberating on whether to initiate an investigation into the legality of crypto.com‘s event contracts that facilitate betting on football matches, particularly with the highly anticipated Super Bowl just around the corner. According to a recent report by Bloomberg, the regulatory agency is contemplating a vote among its five commissioners regarding a potential 90-day review of these contracts to assess their compliance with existing gaming laws.
The CFTC’s inquiry comes at a time when the agency is faced with the rapid growth of event contracts, which allow users to place wagers on various outcomes — from sports events to the phrasing used by political figures in speeches. Notably, these contracts gained traction through decentralized betting platforms like Polymarket, which have limited their operations within the United States to avoid regulatory complications.
One significant aspect of crypto.com‘s offering is the potential to bet on the outcome of college football and National Football League (NFL) games, including the championship Super Bowl XX that is famously one of the most viewed sporting events globally. Users are limited to purchasing up to 2,500 contracts, each priced at $100, while market makers on the platform can maintain positions on up to 250,000 contracts.
Despite the rising scrutiny, a spokesperson for crypto.com has emphasized that the firm had complied with regulatory protocols by notifying the CFTC prior to the launch of these contracts on December 23. The spokesperson expressed concern about the current CFTC leadership’s decisions, stating, “It is disappointing that the current and imminently departing CFTC leadership would consider this action while not allowing the incoming leadership to determine how free markets operate under its administration.”
The implications of the CFTC’s potential investigation could be substantial, as it may lead to restrictions or a complete ban on these contracts following the Super Bowl on February 9. This regulatory review could alter the landscape of betting in the crypto space, challenging the innovative approaches adopted by platforms like crypto.com that seek to integrate traditional betting practices with digital currency transactions.
Furthermore, as the CFTC grapples with its legal oversight, it is also appealing against a court decision involving another betting market operator, Kalshi, which similarly offers contracts that overstep traditional gaming regulations. The outcome could have far-reaching effects on the future of online betting markets and their relationship with cryptocurrencies.
