Offshore crypto betting platforms are playing with fire.
The U.S. Commodity Futures Trading Commission (CFTC) is tightening its grip on offshore crypto betting platforms like Polymarket, warning of enforcement actions against those offering unregistered derivatives contracts to U.S. customers.
“We are observing any activity that’s occurring offshore and is providing exposure to US customers,” CFTC Chair Rostin Behnam stated at a July 17 discussion at Georgetown University’s Psaros Center for Financial Markets and Policy, as per latest crypto news.
Behnam made it clear: if a platform’s footprint in the U.S. is big enough and its derivatives contracts aren’t registered, the CFTC will be stepping in.
Whether it’s exchanges, clearing houses, or brokers, no one is off the hook. “If Polymarket or any other platform breaks the law, we’ll use our enforcement authority to shut it down,” Behnam added.
In recent months, blockchain-based prediction markets have drawn increased scrutiny, with bettors placing their wagers on the upcoming 2024 presidential election. Polymarket, a major player in this space, already paid a $1.4 million settlement in January 2022 after offering more than 900 event-based binary options without registration.
However, the CFTC hit a roadblock in its recent legal battle with blockchain prediction platform Kalshi. The court ruled the agency had overstepped its statutory authority when it ordered the suspension of Kalshi’s election markets, deeming the CFTC’s public interest review unjustified.
Also Read: CFTC Scrambles After Court Loss to Kalshi Over Election Betting
Despite this win for Kalshi, its election markets were halted again on September 12 after an appeals court issued a stay order.
The saga was fueled by a July 5 letter from five U.S. Senators and three House representatives, pushing the CFTC to outright ban betting on presidential elections.
Meanwhile, betting on the 2024 presidential race is heating up. Polymarket’s “Presidential Election Winner 2024” market has seen over $930 million in wagers, while another $208 million has been placed on the “Popular Vote Winner 2024” market, underscoring the high stakes of this political prediction frenzy.
