Analysis of CFTC’s Potential Review of Crypto.com Futures Contracts
The Commodity Futures Trading Commission (CFTC) is considering a 90-day review of Crypto.com’s futures contracts that allow investors to bet on the outcomes of major sports events, including the Super Bowl. This development comes after Crypto.com announced the release of its sports contracts on January 7, 2025, following the submission of the contracts to the CFTC on December 19, 2024.
The CFTC’s potential review is significant, as it may determine whether Crypto.com’s contracts violate laws related to betting contracts. The agency has historically opposed contracts that enable investors to bet on the outcomes of sports matches, wars, assassinations, and other activities that divert from the public interest.
According to a Crypto.com spokesperson, the firm did not plan to launch its new product during the holidays but decided to move forward due to concerns about a potential long government shutdown that might cause the firm to miss out on trading opportunities for the Super Bowl. The spokesperson also claimed that the firm has not been notified of any pending actions from the CFTC.
Notably, Crypto.com’s new sports contracts do not explicitly mention the games by formal names on the firm’s website or social media posts, instead using terms like “Bowl games,” “Pro Football Conference Championships,” and “College Football Championship.” However, the app does display official match names, allowing users aged 18 and above to bet on the outcomes of the AFC championship or the Super Bowl.
Historical Context and Market Trends
In 2021, crypto trading platform ErisX submitted a similar proposal for sports-related contracts, but the exchange pulled its application before the agency could vote to reject it. The market for sports betting in the U.S. is already dominated by platforms like FanDuel and DraftKings, as well as traditional sports books. Mobile sports betting is allowed in 30 states, including Columbia in Canada.
Unregulated exchanges like Polymarket also allow trading for Super Bowl outcomes and other sports matches, claiming that these contracts are inaccessible to U.S. users. The CFTC has previously cracked down on bets on Kalshi.Inc and other exchanges related to sensitive topics, such as the potential guilty plea of an alleged assassin.
Predictions and Potential Outcomes
Given the CFTC’s historical stance on betting contracts, it is likely that the agency will subject Crypto.com’s futures contracts to a thorough review. If the CFTC determines that the contracts violate laws related to betting contracts, Crypto.com may face regulatory action, potentially including fines or the suspension of its sports contracts.
On the other hand, if the CFTC approves Crypto.com’s contracts, it could set a precedent for other crypto exchanges to offer similar products, potentially expanding the market for sports betting in the U.S. However, this outcome is less likely, given the agency’s previous opposition to betting contracts.
Ultimately, the CFTC’s decision will depend on its interpretation of the laws and regulations surrounding betting contracts. As the agency considers the review, it will be essential to monitor developments and updates on the situation.
Key Statistics and Data Points
- 30 states in the U.S. allow mobile sports betting
- $35,000,000: The amount raised by Rexas Finance in its presale
- 40,000+: The number of holders of Rexas Finance
- 100,000+: The size of the Rexas Finance community
- 2021: The year ErisX submitted a proposal for sports-related contracts
- December 19, 2024: The date Crypto.com submitted its sports contracts to the CFTC
- January 7, 2025: The date Crypto.com announced the release of its sports contracts
By examining the CFTC’s potential review of Crypto.com’s futures contracts, we can gain insight into the regulatory landscape surrounding sports betting in the U.S. and the potential implications for the crypto market. As the situation develops, it will be crucial to stay informed about updates and changes in the regulatory environment.
