Gemini and Coinbase Clash with CFTC Over 2024 Presidential Betting Ban!
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Leading crypto exchange Gemini has taken the first step against CFTC. In a bold move, leading cryptocurrency exchange Gemini has urged United States regulators to withdraw a proposed regulation that threatens to ban all event contracts on decentralized prediction markets. We highlight the adverse impact that this rule would have on prediction markets, including those used to forecast elections, Gemini stated in an August 8 letter to Christopher Kirkpatrick, the secretary of the US Commodity Futures Trading Commission (CFTC).
Gemini Against CFTC
Gemini co-founder Cameron Winklevoss used social media to underscore the importance of platforms like Polymarket. The CFTC should withdraw its Proposed Rule on event contracts, which would categorically ban all event contracts in the U.S., like those traded on Polymarket, Winklevoss wrote in an August 9 X post. He emphasized the unique integrity of decentralized prediction markets, which require participants to put their money where their mouth is.
Coinbase Joins the Fight
Another crypto giant Coinbase also voiced its objections. Paul Grewal, Chief Legal Officer of Coinbase argued that the proposed rule fails to recognize the public benefits of prediction markets. We request the CFTC to withdraw this proposal and work alongside academic, industry, and policy stakeholders to develop a more balanced approach that promotes innovation while protecting the public interest, Grewal stated.
Political Pressure and its Market Impact
This confrontation has happened after a fresh demand from five US senators and three representatives for the CFTC. They asked to ban betting on the 2024 presidential election. They argue that such markets could influence and interfere with elections and further erode public trust in democracy.
The debate over this proposed rule has intensified. Polymarket, the worlds largest prediction market, saw record volumes in July. According to Dune Analytics, Polymarket witnessed $387.03 million in volume. This surpasses the $111.5 million recorded in June. This surge reflects fevered speculation over the upcoming US presidential election.
Geminis Argument for Public Utility
Gemini argues that decentralized prediction markets are a significant innovation with real public utility. Unlike polls, pundits, or expert opinions, they require participants to put their money where their mouth is to have skin in the game, Winklevoss claimed. He pointed out that these platforms offer a level of integrity that other information sources cannot match.
The Road Ahead
The decision on this Proposed Rule has big economic consequences. It is important that the CFTC gets this right. The crypto community is watching closely. The debate over the future of prediction markets is unfolding. Will the CFTC listen to industry leaders like Gemini and Coinbase? Or will it give in to political pressure and impose a total ban? The stakes are high. The outcome could shape the future of decentralized prediction markets in the US.
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