In the never-a-dull-moment world of financial regulation, the US Commodity Futures Trading Commission (CFTC) is now giving the stink-eye to Crypto.com and predictions market Kalshi. 🕵️♂️ Their crime? Offering head-scratching Super Bowl contracts that might as well be written in hieroglyphics when it comes to derivatives regulations.
“We are continuing to review the contracts in accordance with our regulations”—this snooze fest of a statement came from a CFTC spokesman, according to Bloomberg on Feb. 3. 💤
Apparently, the CFTC had already been debating whether Crypto.com’s Super Bowl futures contracts were as legal as a parking ticket on a dashboard. Bloomberg had already tattled on Jan. 14.
Crypto.com, ever the eager beaver, informed the CFTC on Dec. 19 that it would start trading these contracts on Dec. 23. 🎅 Little did they know, the CFTC had its metaphorical inbox overflowing, not to mention the holiday season and the ever-present threat of a government shutdown. 📬
Now led by Caroline Pham, the CFTC can’t exactly put an immediate kibosh on the trading of these contracts, owing to a pesky rule that any review must take 90 days. By that time, the Super Bowl would be just a distant memory and many of us would have already forgotten who took home the trophy. 🏆
They could still whack the contracts with a ban hammer later, after all the chips and dip are long gone. 🥑
On Jan. 27, the new CFTC bigwigs announced they’d be squinting hard at emerging issues in the derivatives market. 🔍
Here’s a fun fact: the CFTC can legally demand more details from firms that give a pinky-swear (self-certify) on their financial products. The firms have to prove these products aren’t playgrounds for manipulation and, of course, comply with all those fun derivatives regulations. The CFTC then decides whether it’s time to unleash some enforcement action.
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Not stopping there, Kalshi also lets bettors wager on which companies will run ads during the Super Bowl, attracting another cool $1.5 million in trading volume. Talk about betting on everything but the halftime show! 🏈
Adding to the mayhem, Robinhood Derivatives announced on Feb. 3 that certain traders can now place their Super Bowl bets via its partnership with Kalshi. 🦊
Predictions markets, in case you didn’t know, allow traders from Timbuktu to Tijuana to wager on everything from sports to how many X posts multibillionaire Elon Musk will spit out in a week. 🐦
Many of these markets run on blockchain, including the heavyweight champion, Polymarket, which saw a whopping $3.6 billion in bets on the US election last November. Can’t wait to see what they gamble on next—potentially the weather, or maybe the next avocado toast trend. 🥑
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2025-02-04 03:45