World’s First Prediction Markets Provider Defeats CFTC in Court

As you may remember this is the first time a United States judge has supported the prediction market firm Kalshi in providing derivatives for betting on the US election this coming November. The decision reverses another one issued by the CFTC that had barred Kalshi from providing such products. Such decision can be considered as a special event in the development of prediction markets in the U. S. , as news announced.

US Judge Overturns CFTC Ruling

This came a few days after September 7 in a U. S. District Court for the District of Columbia when Judge Jia Cobb entered a ruling in favor of Kalshi which would allow the platform to sell products that in essence enable users to bet on the occurrence or non-occurrence of certain events such as the U. S. election on November 4. The current ruling reversed the CFTC’s previous decision which stated election derivatives can compromise the elections while election gambling is still prohibited in several US states.

This decision is perceived to be a “huge win” to Kalshi as stated by the chief legal officer of Variant Fund Jake Chervinsky. In [ endeavors ], Chervinsky said “I would like to see the opinion before getting too excited but this is yet further evidence that the way to deal with regulatory run amok is to sue even more. ” [September 7]

Election Markets Legal After 100 Years

Kalshi co-founder and CEO, Tarek Mansour, lauded the ruling saying that election markets are now legal in the U. S. , for the first time in a century. The platform plans to launch new products that enable people to foresee the outcome of the up-coming elections to give a new twist to U. S. prediction markets.

The same is also viewed in a positive light by others in the industry as well as in the Bruce Film documentary. Nick Tomaino, the founder of the crypto fund 1confirmation responded to this comments as follows: ‘’This is good news to those who think it is necessary to have their stakes to be considered as Americans. ’’

CFTC May Appeal

The CFTC retains the opportunity to appeal the decision, although it is unclear if it will choose to do so. Meanwhile, Kalshi is moving ahead with its plans to launch prediction contracts for its users.

Kalshi has already introduced prediction contracts for its clients, including bets on the price movements of Bitcoin (BTC) and Ether (ETH). Other contracts include predictions on how high Bitcoin will reach in 2024 and on the daily BTC price.

In related news, on August 8, Gemini urged the CFTC to withdraw a proposed regulation that would ban event contracts on decentralized prediction markets. The proposal could impact platforms like Polymarket, one of the world's largest prediction markets.

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