Coinbase has urged the US Commodities Futures Buying and selling Fee (CFTC) to withdraw a proposal that might have an effect on prediction markets like Polymarket, in response to an Aug. 8 letter.
Paul Grewal, Coinbase’s Chief Authorized Officer, criticized the proposal for its broad and unclear definition of “gaming” and its assertion that “gaming” contracts are in opposition to the general public curiosity.
Coinbase contends that the proposal exceeds the Fee’s statutory authority and deviates from the usual follow of evaluating contracts individually.
The agency additionally argued that the proposal was economically unsound. Grewal identified that the CFTC’s proposal fails to acknowledge the optimistic financial affect of prediction markets and lacks proof to substantiate claims that these markets might hurt buyers.
The letter said:
“The Proposal questions their scientific benefit and highlights their potential to hurt buyers, however with out citing proof to help these conclusions.
Consequently, Coinbase known as on the CFTC to both withdraw or revise the proposal to help accountable innovation slightly than broadly categorizing all occasion contracts as gaming.
Coinbase asserted:
“We firmly imagine that this all-or-nothing method to the therapy of occasion contracts is just not per the promotion of accountable innovation and development in regulated, clear markets with acceptable safeguards to guard market integrity and shield prospects.”
Coinbase’s transfer gained vital help from the crypto neighborhood, with CoinFund President Chris Perkins urging the CFTC to “cease suppressing innovation and fact.” He added that these platforms aren’t in opposition to the general public curiosity, noting that they supply important datasets that profit the general public.
Prediction markets’ recognition soar
In the meantime, the crypto neighborhood’s protection of prediction markets comes as these platforms have gained vital recognition in the course of the previous yr, significantly in betting on occasions just like the 2024 US presidential election.
Platforms equivalent to Polymarket have seen substantial exercise, with over $1 billion in whole betting quantity and over $550 million in bets on the end result of the US election alone.
In response to this surge, the CFTC proposed in Could to limit particular occasion contracts, particularly these associated to political occasions, citing considerations over market integrity and public curiosity.
Notably, some lawmakers led by Senator Elizabeth Warren just lately supported the regulator’s transfer whereas criticizing the “commodification” of US elections.
