Industry leaders in the crypto sector have rallied against a proposed rule change that could ban political prediction markets in the US. The United States CFTC, or Commodity Futures Trading Commission, has proposed this rule.
These markets allow people to bet on the outcomes of future events. This includes political elections. It has grown in popularity as a tool for forecasting and decision-making. Some in the industry have embraced prediction markets as a key component of their operations.
Major players like Coinbase, Gemini, Crypto.com, Robinhood, and influential blogger Scott Alexander are among those voicing their opposition. They argue that the proposed ban would suffocate innovation and limit access to a rapidly growing area of economic activity.
Coinbase is one of the leading cryptocurrency exchanges. It quickly criticized the proposal of CFTC. Chief Legal Officer of Coinbase, Paul Grewal, wrote on X that event markets are a promising area of the future economy.
He added that they fully support the mission of CFTC to uphold the integrity of the United States derivatives market and believe they can provide a strong regulatory framework for this emerging class of contracts. If adopted, this proposal will unjustly ban many prediction contracts.
The co-founder of Gemini, Cameron Winklevoss, has also voiced disagreement regarding a ban on prediction markets. He urged the CFTC in a post on X to reconsider its approach. Winklevoss also suggests that a more collaborative process with industry stakeholders would be a better path forward.
He wrote that rather than forging ahead and denying Americans access to these powerful markets, the CFTC should withdraw whit Proposed Rule and go back to the drawing board with industry stakeholders. This would be the trust-building move.
Crypto.com’s Senior Vice President, Steve Humenik, also weighed in. He submitted a formal comment to the CFTC. According to Humenik’s argument, the agency should not exceed its regulatory mandate.
