PANews reported on February 4 that according to Bloomberg, the U.S. Commodity Futures Trading Commission (CFTC) is asking Crypto.com and Kalshi Inc. to explain how their recently launched Super Bowl event contracts comply with derivatives regulations. Under the regulations, the agency has the right to require companies that "self-certify" their financial products to provide additional information, including proving that these products are not susceptible to manipulation and meet other regulatory requirements. It can evaluate these responses and decide whether to take any enforcement action or begin drafting new rules. "We are continuing to review these contracts in accordance with our regulations," a CFTC spokesperson said in an email. The agency announced last week that it would hold a public roundtable on emerging issues in the derivatives market, including event contracts.
The regulator voted in January to subject Crypto.com’s sports contracts to a special regulatory review to determine whether they fall into the category of gambling, one of the categories that subject certain contracts to additional scrutiny for whether they are in the public interest. Crypto.com recently withdrew two applications under review and self-certified a new contract related to spectator sports and related industries, according to public agency documents. It’s unclear whether the agency will continue with its original review of the initial sports contracts. Kalshi’s contract, which launched three days after President Donald Trump took office, has not received similar scrutiny.
The agency’s new investigation comes as Robinhood Markets Inc. announced Monday the launch of its own sports trading for its Robinhood Derivatives customers through Kalshi’s exchange.
