The CFTC's position on prediction markets has become even more explicitly forgiving, with the US financial regulator publishing a series of no-action letters.
Four letters issued by the CFTC's Division of Market Oversight responded to requests by specific entities reassuring them that in certain situations, regulations relating to the reporting of swap transactions and pricing data would not be enforced.
Polymarket, newly CFTC-approved DCM Gemini and Aristotle were among those that made the requests in order to ease the burden and costs associated with certain reporting procedures.
Generally, if an exchange like Polymarket was to publicly share pricing or transaction information that was not correct, it would be required that they correct that error.
The Division of Market Oversight has shared its position that it will not pursue enforcement on this point in certain cases, for instance, if the swap is no longer open, or if the error is in anything other than the most recently reported swap data for a particular transaction.
The first set of participants on a CEO Innovation Council set up by the CFTC included a number of high-profile figures in prediction markets.
Polymarket and newly CFTC-approved DCM, Gemini, were both represented on the list, alongside Tarek Mansour, the Kalshi CEO and Crypto.com CEO, Kris Marszalek.
While previously the CFTC has often taken a hands-off approach to the controversy that surrounds prediction markets, these recent moves demonstrate a more active engagement and permissiveness.
Polymarket has also been granted the ability to offer its QCEX contracts through licensed Futures Commission Merchants (FCMs).
This means the prediction market operator is not limited to hosting its contracts on its own platform, but will be free to form partnerships with other companies licensed as an FCM.
With the platform having only just made its long-awaited return to the US market, this will grant it more flexibility in expanding its reach to new users.
The recently announced Coalition of Prediction Markets notably does not feature Polymarket
