The Commodity Futures Trading Commission (CFTC), a US financial regulator, issued a no-action letter to crypto derivatives exchange Bitnomial on Thursday, clearing the way for the exchange to offer event contracts and prediction markets.
The CFTC letter alleviates Bitnomial from the strict reporting requirements for asset swaps under current US rules, a hurdle that is impractical for fast-moving platforms like prediction markets, where tens of thousands of these swaps may occur in a day.
Bitnomial must still provide transparent consumer-facing data on its website, including timestamps and sales data for contract markets, and provide relevant data to the CFTC when requested, according to the terms of the letter.
The first page of the CFTC no-action letter. Source: CFTC
All positions must also be collateralized, meaning they cannot be leveraged and must be backed 1:1 to ensure liquidity and prevent cascading liquidations that threaten the platform’s solvency.
The no-action letter reflects the growing acceptance of prediction markets from US regulators, as blockchain technology opens up new financial use cases that were not possible with legacy financial infrastructure.
Prediction markets gain steam in the US since 2024
Prediction markets gained significant momentum in the US during the 2024 elections, with proponents arguing that they are better than polled data at forecasting outcomes.
Since that time, prediction market platforms like Polymarket and Kalshi have seen increased interest from institutional investors and broken into the cultural zeitgeist.
In September 2025, Kalshi and Polymarket were featured in a South Park episode, a long-running satirical show in the US that touches on major news events and cultural trends.
The following month, Intercontinental Exchange (ICE), the owner of the New York Stock Exchange, invested $2 billion in Polymarket at a $9 billion valuation.
Polymarket founder Shayne Coplan (left) and Intercontinental Exchange CEO Jeffrey Sprecher (right) following $2 billion deal. Source: Shayne Coplan
Crypto exchange Coinbase agreed to acquire The Clearing Company, a prediction market startup, in December, as part of its push into prediction markets.
The deal is expected to close in January 2026, which is the year of the US midterm elections, which will likely boost trading volume on prediction markets as the election season kicks off.
