The U.S. Commodity Futures Trading Commission, which has claimed a role as the leading regulator of prediction market businesses run by companies such as Kalshi, Coinbase, Polymarket and Crypto.com, issued a notice on Friday reminding the companies not to cut corners with far-reaching contract certifications that should cover a wide range of events.
The agency said “broad, template-style certifications should not be submitted,” marking the second time in recent months that the regulator has had to warn against overly generalized submissions.
Many of the “designated contract markets” regulated by the CFTC “continue to self-certify event contracts” (in other words, prediction market contracts) as broad templates “without providing the terms and conditions of each proposed permutation and a concise explanation and analysis with respect to the terms and conditions of the product, the compliance of the underlying commodity, and the compliance of the product agency.”
The regulator said it could undermine the company’s ability to find out whether the firm “has provided all necessary information, explanations and analysis” and has “adequately evaluated the settlement methodology, data sources and compliance with the core principles of all permutations of the contract.”
