CFTC Investigates Crypto.com and Kalshi Over Super Bowl Derivatives
CFTC Investigates Crypto.com and Kalshi Over Super Bowl Derivatives
The Commodity Futures Trading Commission (CFTC) has launched an investigation into Crypto.com and Kalshi regarding the legality of their derivatives products linked to Super Bowl LIX. Both platforms enable users to place wagers on the outcomes of high-profile events, including the upcoming Super Bowl, scheduled for February 9, 2025.
Crypto.com's Sports Events Trading Platform
Crypto.com, a Singapore-based cryptocurrency exchange, introduced a derivatives platform on December 23, 2024, allowing users to bet on the Super Bowl LIX. The game features the Kansas City Chiefs against the Philadelphia Eagles. Crypto.com's co-founder and CEO, Kris Marszalek, emphasized that the platform was regulated at the time of its launch.
Kalshi's Event-Based Trading and Regulatory Concerns
Kalshi, known for its event-based trading contracts, gained prominence during the last presidential election. The CFTC has raised concerns that such betting could compromise the integrity of events. Although a federal court previously dismissed the CFTC's motion against Kalshi's election betting, the agency has indicated its intent to challenge this ruling.
Robinhood's Partnership with Kalshi
On the same day, Robinhood, a crypto-friendly trading app, announced a partnership with Kalshi to offer Super Bowl derivatives contracts. Robinhood had already permitted trading on the 2024 presidential election outcomes, further expanding its offerings in event-based derivatives.
Implications of the Investigation
As regulatory scrutiny intensifies, the outcome of the CFTC's investigation could significantly impact the future availability and regulation of event-based derivative products. This case highlights the growing intersection of cryptocurrency platforms, event betting, and federal oversight.
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