CFTC Monitors Offshore Crypto Betting Platforms

According to Cointelegraph, the United States Commodity Futures Trading Commission (CFTC) is closely monitoring Polymarket and other offshore crypto betting platforms offering derivatives contracts to US customers. The CFTC has warned of enforcement actions against those violating the law. CFTC Chair Rostin Behnam emphasized the agency's vigilance during a discussion at the Georgetown Psaros Center for Financial Markets and Policy on July 17. Behnam stated that any significant activity targeting US customers must comply with legal requirements, and failure to register derivatives contracts will result in enforcement actions. He highlighted the CFTC's commitment to using its civil enforcement authority to halt illegal conduct, which could involve exchanges, clearing houses, and brokers. Blockchain-based prediction markets have faced increased scrutiny recently, particularly with the rising interest in betting on the 2024 presidential election. Behnam referenced Polymarket's $1.4 million settlement with the CFTC in January 2022 for offering over 900 event-based binary options without registration. The CFTC recently experienced a partial setback in a lawsuit against blockchain prediction platform Kalshi. The court ruled that the CFTC had exceeded its statutory authority by ordering Kalshi to suspend its election markets. Despite the CFTC's claims that Kalshi's presidential election markets harmed public interests, the court determined the agency was not authorized to conduct such a review. However, Kalshi's election markets were paused again on September 12 following an appeals court stay order, which remains in effect. This development followed a letter from five US Senators and three House representatives on July 5, urging the CFTC to ban presidential election betting. Polymarket's