Cryptocurrency exchange Gemini has urged U.S. regulators to retract a proposed regulation that would ban all event contracts on decentralized prediction markets if implemented.
In an August 8 letter to Christopher Kirkpatrick, the secretary of the U.S. Commodity Futures Trading Commission (CFTC), Gemini highlighted the negative impact this rule could have, particularly on prediction markets used to forecast elections.
“We highlight the adverse impact that this rule would have on prediction markets, including prediction markets used to forecast elections,” the letter stated.
Cameron Winklevoss, co-founder of Gemini, further emphasized on social media the importance of crypto prediction platforms like Polymarket, noting the transparency they offer users.
“The CFTC should withdraw its Proposed Rule on event contracts, which would categorically ban all event contracts in the U.S., like those traded on Polymarket, the world’s largest prediction market,” Winklevoss wrote in an August 9 post on X (formerly Twitter). He argued that these platforms differ from polls or expert opinions because they require participants to back their predictions with money, thereby ensuring a higher level of commitment and accuracy. “Decentralized prediction markets are a significant innovation with real public utility,” Winklevoss added, highlighting that platforms like Polymarket’s proof-of-stake requirement give them integrity that other platforms cannot match.
Crypto exchange Coinbase also expressed concerns about the proposed rule. Paul Grewal, Coinbase’s chief legal officer, argued that “the proposal fails to recognize the public benefits of prediction markets.” He urged the CFTC to work with academic, industry, and policy stakeholders to find a more balanced approach that fosters innovation while protecting the public interest.
The debate comes as five U.S. senators and three representatives renewed calls for the CFTC to ban betting on the 2024 presidential election, arguing that such markets could “influence and interfere with elections and further erode public trust in democracy.”
This discussion occurs amid a surge in activity on Polymarket, with the platform recording $387.03 million in volume in July, surpassing previous records.
