Congressman Ritchie Torres has referred to as on the Commodity Futures Buying and selling Fee (CFTC) to manage election-related prediction markets somewhat than blocking them.
In a letter addressed to CFTC Chair Rostin Behnam, Torres urged the regulator to concentrate on selling accountable innovation and dealing with platforms like Kalshi and Polymarket to make sure such markets are regulated somewhat than pushing merchants in direction of unlawful, unregulated platforms.
Torres’ letter adopted a Sept. 6 courtroom ruling that partially overturned the CFTC’s efforts to forestall Kalshi, a US-based prediction platform, from providing election-related contracts. He emphasised that additional authorized challenges may hurt each election integrity and shopper safety, permitting unlawful platforms to flourish.
Torres wrote:
“The CFTC has a mandate to advertise accountable innovation.”
He urged the company to collaborate with regulated market contributors, making certain election-related contracts are carried out transparently and securely inside regulated markets.
Polymarket declines amid uncertainty
Polymarket has seen a big decline in exercise over the previous few days as regulatory strain and uncertainty over election betting proceed to mount.
In line with Dune Analytics, Polymarket’s day by day lively merchants dropped by almost 40%, from 12,595 on Sept.11 to 7,627 by Sept. 15. The platform’s day by day buying and selling quantity additionally fell dramatically, down 85.6%, from $37.2 million to $5.35 million over the identical interval.
The drop in exercise follows the CFTC’s proposal to restrict sure occasion contracts, significantly these associated to political outcomes. The regulator has expressed considerations concerning the potential for manipulation in such markets, citing situations the place fabricated data, like a pretend ballot involving musician Child Rock, distorted market costs.
Regardless of the regulatory challenges, Polymarket has gained some mainstream recognition, with Bloomberg not too long ago integrating the platform into its monetary terminals. The transfer means that curiosity in decentralized prediction markets is rising, whilst regulators scrutinize the sector extra carefully.
Intensifying debate
The controversy over election prediction markets intensified on Sept. 6 when a federal courtroom dominated in favor of Kalshi, permitting the platform to supply election-related contracts. The platform hailed the choice as a historic second, stating that for the primary time in 100 years, People may legally commerce on election outcomes.
Nonetheless, the CFTC rapidly filed an emergency movement to remain Kalshi’s election markets, citing considerations about potential manipulation. The company has argued that election markets may undermine public belief within the democratic course of.
The CFTC’s actions have confronted criticism from lawmakers like Torres, who urged the watchdog to simply accept the courtroom’s ruling and concentrate on regulating these markets to make sure transparency and shopper safety.
Torres wrote in his letter:
“The CFTC ought to be specializing in regulating exchanges, defending customers, and safeguarding the integrity of elections.”
He warned that continued authorized battles may push merchants towards unregulated platforms, additional jeopardizing election integrity.