Gemini has formally requested that U.S. regulators reconsider a proposed rule that would ban event contracts on decentralized prediction markets including those on Polymarket, a well-known prediction market.
In an Aug. 8 letter to Christopher Kirkpatrick, the Secretary of the U.S. Commodity Futures Trading Commission (CFTC), Gemini highlighted the negative impact this rule could have. The crypto exchange argues that banning these markets would reduce transparency and limit innovation in predicting various events, such as elections.
Gemini co-founder Cameron Winklevoss also shared his concerns on X, pointing out that decentralized prediction markets require participants to put their money where their mouth is, which he believes adds a level of honesty and accuracy to the predictions.
“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, the world’s largest prediction market” Winklevoss tweeted
Coinbase, another crypto exchange, has joined Gemini in opposing the rule. Coinbase’s Chief Legal Officer, Paul Grewal, stated that the rule doesn’t recognize the benefits of prediction markets. Grewal called for a more balanced approach that supports innovation while addressing public concerns.
The proposed regulation comes amid renewed scrutiny from five Senators and three House Representatives, who have recently urged the CFTC to ban betting on the 2024 presidential election. They argue that such markets could potentially influence the election and undermine public trust in democratic processes.
The debate around this proposed rule has gained momentum as Polymarket reported record trading volumes in July, driven by increased speculation about the upcoming presidential election.
According to Dune Analytics, Polymarket experienced $387.03 million in trading volume in the last 30 days.
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