US regulators signal growing acceptance of prediction markets and event-based trading
The US Commodity Futures Trading Commission has issued a no-action letter to Bitnomial, clearing regulatory hurdles for the crypto derivatives exchange to offer event contracts and prediction markets. The decision reflects a broader shift in regulatory posture as US authorities grow more comfortable with blockchain-enabled financial products, particularly in an election-driven trading environment.
The no-action letter relieves Bitnomial from certain asset swap reporting requirements that are impractical for high-frequency platforms like prediction markets, where tens of thousands of contracts can trade daily. In exchange, Bitnomial must maintain transparent, public-facing market data, including timestamps and sales information, and provide detailed records to regulators upon request.
All event contracts must be fully collateralized on a 1:1 basis, prohibiting leverage and reducing the risk of liquidity shortfalls or cascading liquidations. This requirement is designed to protect users while preserving platform stability.
The decision underscores increasing regulatory acceptance of prediction-style markets, which gained prominence during the 2024 US elections. Supporters argue these markets often outperform traditional polling in forecasting outcomes.
Since then, prediction platforms have attracted institutional interest, mainstream attention, and strategic investment. With the 2026 US midterm elections approaching, trading activity is expected to accelerate.The CFTC’s move suggests that event contracts are becoming a recognized financial instrument, paving the way for regulated growth in prediction markets built on modern blockchain infrastructure.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.