CFTC issues blanket no-action letter on prediction markets, relieving swap data reporting duties
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The Commodity Futures Trading Commission's staff has issued a no-action letter that effectively relieves swap data reporting and recordkeeping requirements for prediction market platforms.
Key facts
The letter currently lists 19 beneficiaries, including Polymarket US, Kalshi, Gemini Titan, and Bitnomial
Earlier this week, the CFTC challenged Ohio's 2025 complaint against Kalshi, arguing that the state is overstepping federal jurisdiction
The Commodity Futures Trading Commission's staff has issued a no-action letter that effectively relieves swap data reporting and recordkeeping requirements for prediction market platforms
According to the announcement published on Wednesday, the CFTC's Division of Market Oversight and Division of Clearing and Risk said they will not recommend the agency to launch enforcement actions
Summary
According to the announcement published on Wednesday, the CFTC's Division of Market Oversight and Division of Clearing and Risk said they will not recommend the agency to launch enforcement actions against designated contract markets (DCMs) and clearinghouses for failing to abide by such reporting requirements. "This position is in response to numerous requests from DCMs and DCOs that list and clear event contracts," the announcement said. The no-action letter was published to eliminate regulatory uncertainty for platforms offering event contracts, which technically qualify as "swaps" in that they are based on events with binary outcomes. "Such contracts may meet the 'swap' definition, but are listed for trade by DCMs (rather than swap execution facilities) and have similar characteristics as futures and options on futures, including highly-standardized terms, exchange-trading protocols, fungibility, and offset," the letter said.