Gemini urges CFTC to withdraw proposed rule on event contracts

Cryptocurrency exchange Gemini has urged United States regulators to withdraw a proposed regulation which, if passed, would ban all event contracts on decentralized prediction markets.

“We highlight the adverse impact that this rule would have on prediction markets, including prediction markets used to forecast elections,” Gemini stated in an Aug. 8 letter to Christopher Kirkpatrick, the secretary of the US Commodity Futures Trading Commission (CFTC).

Winklevoss claims these platforms offer more integrity

Gemini co-founder Cameron Winklevoss made further comments on social media about why he thinks crypto prediction platforms like Polymarket are important, pointing out the transparency they offer users.

“The CFTC should withdraw its Proposed Rule on event contracts, which would categorically ban all event contracts in the U.S., like those traded on Polymarket, the world’s largest prediction market,” Winklevoss wrote in an Aug. 9 X post.

“Unlike polls, pundits, or expert opinions, they require participants to put their money where their mouth is — to have skin in the game,” Winklevoss claimed.

“Decentralized prediction markets are a significant innovation with real public utility.”

He explained that platforms like Polymarket’s proof-of-stake requirement gives them a level of integrity that other platforms can’t match.

Crypto exchange Coinbase also raised objections to the proposed rule. Coinbase chief legal officer Paul Grewal stated that "the proposal fails to recognize the public benefits of prediction markets."

"We urge the CFTC to withdraw this proposal and work alongside academic, industry, and policy stakeholders to develop a more balanced approach that promotes innovation while protecting the public interest," Grewal wrote.

US government says it may interfere with election

It comes after five US Senators and three House representatives have renewed calls for the CFTC to ban betting on the 2024 presidential election.

They claimed that such markets “could influence and interfere with elections and further erode public trust in democracy” in an Aug. 5 letter to the CFTC Chair, Rostin Benham.

On July 17, Cointelegraph reported that fevered speculation over the US presidential election has driven Polymarket's volumes to record levels — with more volume recorded in the first two weeks of July than any other month in its history.

According to Dune Analytics, Polymarket witnessed $387.03 million to volume in July, surpassing the $111.5 million in volume throughout June, its previous top month.