The CFTC are voting on whether Crypto.com futures contracts, that let investors bet on who will win major football games including the Super Bowl, should be subject to a 90-day review.
According to a Bloomberg report published on Jan. 14, the five-member federal commission are considering whether to probe Crypto.com over future contracts trading that lets investors bet on the outcome of major sports events, according to sources close to the matter.
The CFTC have yet to determine whether the contracts listed on the firm’s Chicago-based derivatives exchange violate the laws laid out regarding betting contracts. The agency has long been opposed to contracts that let investors bet on the outcome of sports matches, wars, assassinations and other activities that divert from the public interest.
Crypto.com announced the release of their sports contracts on Jan. 7, after following legal procedures and alerted the CFTC on Dec. 19 about its upcoming contracts launch just two days before Christmas. However, the agency did not have time to review the contracts as they were submitted before the holidays.
Initially, the firm did not plan to launch their new product during the holidays but decided to move forward due to fear of a long government shutdown that might cause the firm to miss out on trading opportunities for the Superbowl, said a Crypto.com spokesperson to Bloomberg.
Crypto.com’s spokesperson claimed the firm has not been notified of any pending actions from the CFTC.
“It is disappointing that the current and imminently departing CFTC leadership would consider this action while not allowing the incoming CFTC leadership to determine how free markets operate under its administration,” said the spokesperson.
On the other hand, a CFTC representative declined Bloomberg’s request for comment regarding this matter.
Crypto.com’s new sports contracts do not explicitly mention the games by formal names on the firm’s website or social media posts, simply naming them “Bowl games,” “Pro Football Conference Championships,” and “College Football Championships.” However, the app does display official match names, enabling users aged 18 and above to bet on the outcomes of the AFC championship or the Super Bowl.
In 2021, crypto trading platform ErisX submitted a similar proposal for sports-related contracts. Although, the exchange pulled its application before the agency could vote to reject it.
In the U.S. the market for sports betting has already been dominated by platforms like FanDuel and DraftKings, as well as old-fashioned sports books in the country. Mobile sports betting is actually allowed in 30 states, including Columbia in Canada.
Polymarket, an unregulated exchange, also allows trading for Super Bowl outcomes as well as many more sports matches. It claims these contracts are inaccessible to its U.S. users.
Last December, the CFTC cracked down on bets on Kalshi.Inc and other exchanges related to whether Luigi Mangione, the alleged assassin of UnitedHealthcare CEO Brian Thompson, would plead guilty to murder.
