Posted on: January 13, 2025, 05:31h.
Last updated on: January 13, 2025, 05:31h.
The Commodities and Futures Trading Commission (CFTC) is said to be considering examination of Crypto.com’s recently unveiled sports event contracts, but that’s unlikely to interfere with the brokerage firm’s plans to offer derivatives on the Super Bowl.
Sources close to the matter told Bloomberg News that the CFTC is in the process of voting on a measure that would subject the cryptocurrency trading platform’s sports event contracts to a 90-day review. Even if that evaluation were to take place, it would end well past the Super Bowl, which is scheduled for Sunday, Feb. 9 in New Orleans.
It’s believed that the CFTC wants to look into whether or not the sports contracts offered by Crypto.com could violate gaming laws, reports Bloomberg. The financial services firm announced its plans to offer the derivatives just two days before Christmas and while it apprised the regulatory agency of those plans, the CFTC didn’t have adequate time to review the plan due to the holiday.
The company described the new sports event trading offering as the first of its kind, noting it will be offered by Crypto.com | Derivatives North America, which is regulated by the Commodities and Futures Trading Commission.
Interesting Timing for CFTC to Examine Crypto.com Contracts
The timing of the CFTC potentially taking up a review of the sports events contracts offered on Crypto.com is interesting because President-elect Trump becomes the 47th US president next Tuesday, meaning leadership will change at the commission. That’s not lost on Crypto.com.
It is disappointing that the current and imminently departing CFTC leadership would consider this action while not allowing the incoming CFTC leadership to determine how free markets operate under its administration,” a representative of the cryptocurrency broker told Bloomberg.
Trump hasn’t named a new chairman to lead the CFTC, but his picks to lead the Securities and Exchange Commission (SEC) and the Treasury Department are widely viewed as more crypto-friendly than their soon-to-be predecessors, stoking speculation that regime change at the CFTC could be favorable for Crypto.com and other financial firms looking to offer event contracts.
Signaling that event wagering platforms are looking to gain favor with regulators, Donald Trump Jr. is joining Kalshi — one of the largest companies in the space — as a strategic adviser.
Sports Event Contracts Could Be New Wagering Frontier
Including Crypto.com, multiple brokerage firms have expressed interest in getting into the event contract arena and some of said they’d like to steer those efforts toward sports derivatives.
Should those contracts gain regulatory approval, it could represent a significant competitive threat to traditional sportsbook operators because those companies receive approvals to offer iGaming and sports wagering on a state-by-state basis. On the other hand, firms such as Crypto.com and Kalshi are regulated at the federal level and can offer their trading services in all 50 states. Sports wagering is currently allowed in 38 states and Washington, DC. Missouri joins that group later this year.
Last week, Crypto.com expanded its sports event contracts menu to include the NFL conference championship and the last three games of the college football playoffs (CFP).
