Dragonfly Joins Crypto.com, Coinbase in Opposing CFTC’s Proposed Ban on Prediction Markets

Jessica Furr from Dragonfly Digital Management and consultant Bryan Edelman wrote to the U.S. CFTC: "Political event contracts should not be equated with gambling activities such as the Super Bowl. Elections have significant economic impacts, and these contracts are designed to provide key risk hedging functions, comply with the requirements of the Commodity Exchange Act (CEA), and provide valuable forecasting data to the public." Dragonfly also believes that the CFTC's proposed rules are overreaching because they broadly prohibit market predictions that have not been properly evaluated, especially in light of the Supreme Court's recent ruling in the "Chevron" case, which limits the CFTC's right to interpret without congressional authorization. In addition, Joseph Fishkin, a law professor at the University of California, Los Angeles (UCLA), also pointed out that prediction markets provide valuable insights into public opinion and political events and should not be regulated in a way that closes prediction markets in the United States. (CoinDesk) Previously, the U.S. CFTC voted in May to pass a rule that, if finalized, would prohibit betting on political races and other event contracts, and such contracts would not be allowed to be listed or cleared through CFTC-registered entities. Earlier this week, Senator Elizabeth Warren urged CFTC Chairman Rostin Behnam to "quickly" finalize rules prohibiting political event contracts. In response, Steve Humenik, senior vice president and global head of capital markets and law at Crypto.com, and Paul Grewal, chief legal officer at Coinbase, expressed opposition.