U.S. Commodity Futures Trading Commission (CFTC) has sparked a major debate in the cryptocurrency world by taking a step towards regulating prediction markets. These proposed rules have been called an overreach by crypto players. Big names like Dragonfly and Crypto.com say the CFTC’s move oversteps legal boundaries and undermines innovation.
Concerns Raised Over Political Event Contracts
Dragonfly points out the impact of the CFTC’s broader ban on prediction markets, particularly on political event contracts. Dragonfly emphasizes that such contracts are critical to economics and risk management, and that the CFTC is wrong to equate such contracts with gambling. He argues that political events have large economic consequences and that such contracts provide valuable insights to the public. A Prize Pool Worth 21 Million TL Awaits You from BinanceTR! Participating and winning has never been easier.. You can sign up to BinanceTR from this link. Get your first crypto!
Dragonfly also reminds us that the CFTC’s interpretive authority was limited by the US Supreme Court’s ‘Chevron’ decision. Following this decision, it is stated that the CFTC should not overdo it when making new regulations in cases where Congress has not given it clear authority. In this context, it is emphasized that the legal basis of the CFTC’s broad prohibitions on prediction markets should be questioned.
CEA Three-Step Process and Legal Opinions
Steve Humenik, Crypto.com’s chief executive, said the CFTC should consider the three-step process set forth by the CEA when implementing such bans. This process requires a contract to be evaluated against certain criteria before it can be banned. Humenik said it is unacceptable for the CFTC to bypass this process and impose rules.
Cryptocurrency Critics from outside the world also oppose the CFTC’s proposal. UCLA Law Professor Joseph Fishkin says prediction markets can provide valuable insights into political events for the public. Fishkin believes banning such markets in the U.S. would reduce the diversity of information and analysis and harm society.
The CFTC’s sweeping attempts to ban prediction markets have been widely criticized in the cryptocurrency industry, with Dragonfly, Crypto.com, and others arguing that the rules are overreaching and stifle innovation. In this context, the CFTC must act in accordance with legal process and the public interest.
Disclaimer: The information contained in this article does not contain investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
