The Crypto Industry Pushes Back Against Proposed Ban on Derivatives Trading
The crypto industry is retaliating against the proposed ban on derivatives trading, with Polymarket, a betting app, continuing to gain popularity despite being banned for US users in 2022. Recent data shows that the platform’s total crypto assets have increased threefold this year, with users wagering $606.6 million on the US presidential election alone.
However, this surge may not be enough, as the Commodity Futures Trading Commission (CFTC) is proposing a regulation that could ban all derivatives trading connected to US elections. This decision has caused controversy within the crypto industry, with many leaders opposing the proposed rule.
The CFTC’s settlement with Polymarket in 2022 required the platform to ban US users and pay $1.4 million in civil penalties. Nevertheless, Americans are finding ways to continue using the platform, just like they did with other “banned” platforms such as FTX and Binance.
Industry insiders, such as Astustra founders Tyler and Cameron Winklevoss, are vocal in their opposition to the proposed rule that would deny Americans access to prediction markets, which are crucial for measuring public opinion and predicting election results.
The ban would likely have a greater impact on the US-based competitors Kalshi and PredictIt, which are still available to users. As the agency seeks to clarify its position on cryptocurrency derivatives, which are gaining popularity in betting and prediction markets, the crypto industry is also closely monitoring Kamala Harris, who is expected to make a statement on her stance towards crypto policy in the next few months.
Harris’s position on crypto could be a turning point in the Democratic presidential race, as it could have significant implications for the industry. Industry leaders are optimistic that Harris will take stances on the issue more prominently than it has been in recent weeks.
Coinbase and MicroStrategy have become major institutional investors in the crypto space, which is expected to play a significant role in shaping political discourse as we approach the 2024 presidential election. Institutional investors are increasingly investing in the crypto space due to this move.
Despite the uncertain regulatory environment, the proliferation of betting apps and prediction markets has transformed the game for political analysts and investors alike. Although the CFTC’s proposed ban on derivatives trading related to US elections may not be successful, the crypto industry will likely resist any attempts to restrict its growth and innovation.
As a result, they are already bracing themselves for arguably disruptive regulatory action. Despite industry leaders’ efforts to counter the rule, the popularity of betting apps like Polymarket has surged, with users placing bets on US presidential election results.
As the crypto industry awaits Kamala Harris’s position on crypto policy, there is no doubt about the future of crypto regulation. Industry leaders are optimistic about the growth and innovation of the crypto industry, despite the challenges it faces.