Crypto Exchanges
By Dan Saada
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States and Consumer Groups Call It Gambling. State gaming regulators from Tennessee, Missouri, and Pennsylvania don't buy it.
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What Happens Next for Crypto Platforms. Crypto platforms already run prediction markets. Polymarket's one example. Kalshi's another.
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The CFTC just closed comments on prediction markets. Over 1,500 people weighed in. And the split's pretty stark—some want these contracts treated like swaps, others say they're…
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Coinbase, Kalshi, and Andreessen Horowitz all pushed hard for the swap classification. Their argument?
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State gaming regulators from Tennessee, Missouri, and Pennsylvania don't buy it. Neither does Better Markets, a consumer advocacy group.
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The CFTC's decision matters a lot. If the agency sides with Coinbase and Kalshi, prediction markets get federal preemption.
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Crypto platforms already run prediction markets. Polymarket's one example. Kalshi's another. They've seen wild growth, especially around elections and macro events.
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The debate's not just about prediction markets, though. It's about where the line sits between finance and gambling. And that line's gotten blurry.
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See also: Prediction Markets See First Block Trade as Institutions Jump In
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The CFTC received comments from academics, too. Some economists said prediction markets are better at forecasting than polls or expert panels.
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Federal preemption would be a big win for the industry. It would mean one set of rules instead of 50.
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The outcome will set a precedent. Not just for prediction markets, but for how new financial products get categorized.
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Read also: a16z Backs Kalshi and Polymarket as States Try Shutting Prediction Markets Down
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The stakes are high for platforms like Kalshi and Polymarket. A federal ruling in their favor would unlock institutional capital and mainstream adoption.
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The CFTC hasn't said when it'll rule. The comment period closed, but the agency could take months to review submissions and draft final rules.
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