Blockchain.com Seeks CFTC Nod for Prediction Markets

Blockchain.com Seeks US Regulatory Approval for Prediction Markets and Derivatives

The cryptocurrency firm Blockchain.com has reportedly applied for two licenses with the U.S. commodities regulator, as legal challenges surrounding prediction markets continue.

According to a Friday report by CNBC, Blockchain.com has submitted applications to the U.S. Commodity Futures Trading Commission (CFTC) for approval to offer prediction market products and crypto derivatives. The exchange is seeking licenses as a designated contract market (DCM) and a futures commission merchant (FCM). These approvals would enable Blockchain.com to operate as a futures exchange for event contracts and as a broker for derivatives contracts, respectively, serving both U.S. retail and institutional investors.

This move follows Blockchain.com’s July announcement of a planned partnership with Polymarket for the integration of prediction markets into the company’s app. However, if approved by the CFTC, the new license would allow the exchange to establish its own marketplace for event contracts.

The regulatory landscape for prediction market platforms such as Kalshi and Polymarket is currently under scrutiny in U.S. courts. Numerous state authorities have filed lawsuits against these companies, alleging violations of laws related to betting on sports and elections. Last month, New Jersey officials petitioned the U.S. Supreme Court to review their case against Kalshi, a decision that could clarify disputes between federal and state regulators.

In related news, prediction markets have seen a surge in activity, with Polymarket expanding into areas like Sam Altman’s ventures.

Blockchain.com has also reportedly been exploring an initial public offering (IPO) with a valuation of up to $6 billion, aiming to raise $500 million.

This week, CFTC Chair Michael Selig emphasized the agency’s preference for regulatory rulemaking over congressional legislation to advance cryptocurrency oversight, citing the collapse of the FTX exchange. FTX filed for bankruptcy in November 2022, leading to criminal charges against several of its executives, including former CEO Sam Bankman-Fried.

In a Fox Business interview on Wednesday, Selig stated that proposed rules for companies registering as licensed crypto businesses would introduce “safeguards to crypto spot markets,” referencing FTX’s downfall. On Friday, he further commented that the agency’s rules are designed to prevent “theft of customer funds as we saw with FTX.”

Selig currently serves as the CFTC’s sole commissioner and chair. As of Friday, the White House had not announced any nominations for the four vacant seats on the commission. Selig has consistently stated his intention to implement President Donald Trump’s crypto agenda and has asserted the CFTC’s exclusive jurisdiction over prediction markets.