Gemini cleared by CFTC to launch prediction market platform

Crypto exchange Gemini Space Station, Inc. has received approval from the Commodity Futures Trading Commission (CFTC) to operate a Designated Contract Market (DCM), clearing the way for the launch of its prediction market platform, Gemini Titan.

The platform will initially offer binary event contracts with plans to expand into other CFTC-regulated derivatives, including crypto futures, options, and perpetual contracts.

Reports indicate that Gemini first applied for a designated contract market license on March 10, 2020. At the time, the company was not explicit whether Gemini was looking to launch a prediction market platform. DCMs are the standard regulatory classification for most CFTC-registered trading facilities.

U.S. prediction markets gain momentum amid regulatory shift

The U.S. prediction market sector has experienced rapid growth, particularly during last year’s election cycle. Reports indicate that the leading platforms Kalshi and Polymarket saw record trading volumes in October and November, and are on track to post similar activity this month, according to The Block.

Historically, the CFTC has taken a cautious approach to the sector, banning Polymarket and permitting only Kalshi to list new limited-event contracts. Still, things took a different turn after Kalshi’s legal victory against the CFTC related to political betting markets, opening the door to further expansion into sectors like sports betting.

Going forward, the CFTC, led by Acting Chair Caroline Pham, has indicated even greater support for prediction markets under Trump’s second term. Trump’s social media firm also intends to launch a Truth Social prediction market. 

Truth Prediction event contracts would be offered through Crypto.com Derivatives North America, a Commodity Futures Trading Commission-registered arm of the exchange, Trump Media said. The company also stated that Crypto.com’s native token, CRO, would be required to trade Truth Predict event contracts, adding that it would enable the conversion of its in-app reward tokens, called Truth Gems, into CRO.

“Prediction markets have the potential to be as big or bigger than traditional capital markets. Acting Chairman Pham understands this vision and its importance,” Gemini President Cameron Winklevoss said. ”Unlike her predecessor, Acting Chairman Pham has positioned the CFTC as a pro-business, pro-innovation regulator that will allow America to lead in these new and exciting markets.”

The Winklevoss twins, Cameron and Tyler, voiced concerns about Trump’s initial pick to lead the CFTC, Brian Quintenz, due to potential financial biases, given his position at the a16z venture firm and board seat at Kalshi. The Block was first to report.

Exchanges race to expand into sports and crypto derivatives

Gemini’s move comes as other U.S. exchanges also explore the use of prediction markets. Crypto.com already powers several branded platforms, while Coinbase appears to be testing a betting market within its wallet.

Polymarket has launched a new mobile app in the U.S., enabling consumers to bet on sports events with real money under federal oversight. It’s a welcome rebound for Polymarket in the U.S. market from regulatory challenges this season.

The platform had not been allowed to operate domestically after the Commodity Futures Trading Commission (CFTC) found that it was trading unregistered event-based derivatives, leading to a $1.4 million settlement and a resurgence in compliance. After the CFTC approved their launch, Polymarket became a U.S. federal intermediated exchange, like traditional commodities websites. The company insists it is not a sportsbook; it is an opportunity to trade on the results of real-world events.

Presently, the app focuses on sports, offering odds markets for major games and tournaments. However, the platform says it plans to expand quickly into proposition bets.

Polymarket’s comeback to the U.S. aligns with growing interest in prediction markets as alternatives to polling and punditry.

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