Crypto.com is building an internal market-making team with the stated goal of profiting from trading on its own prediction market, Bloomberg reports.
This move might raise significant conflict-of-interest questions for the CFTC-regulated platform and challenge the industry's core promise of having "no house."
The company is actively hiring a "quant trader" to join a team. According to the job listing, the person will "maximize profits while carefully managing risks" by trading on the firm's own sports-related contracts.
This practice strikes at the heart of how prediction markets have distinguished themselves from traditional sportsbooks. While sportsbooks set odds and profit when bettors lose, prediction markets have argued to regulators that they are neutral venues where users simply trade against each other.
When Prediction Markets Start Acting Like the House
By creating an internal desk designed to profit from user activity, Crypto.com is effectively building its own "house." The practice raises concerns over whether it is in line with the principles of a CFTC-regulated derivatives market.
The potential for conflict is amplified by an alledged Crypto.com rule granting market makers a three-second head start over retail traders placing wagers. This policy could allow the internal desk to see incoming retail interest and adjust its own prices before smaller traders can act.
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This is not an isolated incident but a growing industry trend. Competitor platform Kalshi already operates a similar internal unit, which is the subject of a class-action lawsuit alleging it disadvantages customers. Rival Polymarket, after settling its own case with the CFTC, is also reportedly recruiting for its own trading team.
A spokesperson for Crypto.com defended the practice, stating that its internal market maker "does not have access to proprietary data or customer order flow" before other participants and that the ultimate result is beneficial for users.
"The bottom line for customers is more competition and liquidity on the platform creates a better overall experience," they added. However, as prediction markets push for mainstream acceptance in the U.S., they face a fundamental identity crisis.
The move to create internal, profit-seeking trading desks puts them on a potential collision course with the very regulatory framework they sought for legitimacy, forcing regulators and users to ask a simple question: are these neutral exchanges, or are they just sportsbooks in disguise?
