The U.S. Commodity Futures Trading Commission (CFTC) is preparing a new framework for reviewing prediction market contracts, according to a Wall Street Journal report. Instead of broad prohibitions on entire categories, the agency plans to establish a formal process for evaluating event-based contracts. The proposal would outline factors regulators can use to decide whether a contract serves the public interest.
Sports, War Contracts Subject to Case-by-Case Review
Under the planned rules, certain sports-related contracts — particularly those tied to player injuries or highly specific in-game events — could face additional scrutiny. Regulators may evaluate these separately before allowing them to trade. Contracts linked to wars, terrorism, political violence, or assassinations would face even stricter examination. The CFTC is considering public-interest standards for these categories, allowing individual contract assessment instead of blanket bans.
The move comes as the CFTC takes a more active role in overseeing emerging financial markets. Earlier, crypto.news reported that the agency warned regulated derivatives venues that 24/7 trading models may work for crypto-native products but not for every traditional asset class.
Insider Trading Trial Looms, Legal Heat on Prediction Markets
Legal scrutiny on prediction markets is intensifying alongside regulatory rulemaking. As reported by crypto.news, a Manhattan court has scheduled a December 7 trial for U.S. Army soldier Gannon Van Dyke in what prosecutors call the first U.S. insider trading case involving a prediction market. Federal prosecutors allege Van Dyke used classified military intelligence related to an operation targeting Venezuelan President Nicolás Maduro to place profitable bets on Polymarket. Court filings show he turned roughly $33,000 into more than $410,000 through 13 Venezuela-linked wagers. Van Dyke pleaded not guilty at his April arraignment.
Kalshi Launches XRP Perpetual Futures Ahead of Rule Clarity
While the CFTC framework remains under discussion, regulated platforms continue expanding. On June 10, Kalshi launched XRP perpetual futures under the XRPPERP ticker, giving U.S. traders leveraged XRP exposure via cash-settled contracts with no expiration. The addition extends Kalshi's crypto derivatives lineup beyond Bitcoin and Ethereum, introducing another crypto product into a CFTC-regulated marketplace.