As the midterm elections draw near, all eyes are now on the Commodity Futures Trading Commission, or CFTC, as they make a pivotal decision on whether to start a formal 90-day review of prediction market provider KalshiEX’s contract. This contract would allow users to bet on which party takes control of the U.S. Congress, making it an exciting prospect for anybody looking to place a well-informed bet.
KalshiEX’s Contract Proposal: Withdrawal and Plans for Resubmission
Prediction markets like Polymarket and PredictIt have faced regulatory challenges, leading to orders to cease business in the U.S. KalshiEX had submitted a contract for CFTC review but later withdrew it, planning to submit a new proposal. These cash-settled, binary contracts would enable users to predict which party holds majority control of the two chambers of Congress.
This decision adds to the list of verdicts related to cryptocurrency and blockchain during the CFTC’s regulatory efforts. Attendees at the CFTC’s meeting discussed policy considerations, digital asset regulations, and decentralized finance (DeFi).
The need for clarity in digital asset regulation has become pressing in the current session of Congress. Rep. Tom Emmer’s bill limits the Fed’s authority in issuing a central bank digital currency. The SEC acts against Paxos over Binance USD.
CFTC Commissioner’s Call for Targeted Recommendations in Regulatory Framework
To successfully enforce a regulatory framework tailored to the changing conditions of the industry, CFTC commissioner Kristin Johnson reacted with an opening statement before the Market Risk Advisory Committee Meeting, advocating for targeted recommendations to address “climate-related risks” and digital asset markets.
Johnson has urged for legislation to address gaps in oversight of crypto spot markets and prioritize customer protection. That includes expanded rights to investigate potential buyers of 10% or more of CFTC-regulated entities. The commissioner has highlighted the need for closer scrutiny and tailored governance in risk management controls of crypto companies.
Whether the Commission decides to start a formal 90-day review of KalshiEX’s contract will remain a closely watched decision. Betting on the midterm elections appears to be a promising opportunity for informed and adventurous investors.
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