CFTC Targets Crypto.com for Super Bowl Trades: Will Robinhood Be Next?
The
Commodity Futures Trading Commission (CFTC) has launched an investigation into
Super Bowl-related event contracts offered by Crypto.com and Kalshi, questioning
their compliance with derivatives regulations as the market for sports-based
trading products expands rapidly.
Interestingly,
on Sunday, another major player in the retail trading arena—Robinhood—launched
the exact same contracts in partnership with the event contracts exchange.
This raises the question of whether it might soon fall under the
regulator’s scrutiny.
The CFTC’s
investigation centers on whether these sports-focused event contracts qualify
as gaming under existing regulations. The agency is particularly interested in
how these products comply with derivatives rules and whether they’re
susceptible to market manipulation.
“We
are continuing to review the contracts in accordance with our
regulations,” a CFTC spokesman stated, noting that the agency plans to
hold public roundtables on emerging issues in derivatives markets, including
event contracts.
🇺🇸 LATEST: The US CFTC is reportedly investigating Super Bowl markets offered by Crypto. com and Kalshi, asking them how they comply with derivatives rules. pic.twitter.com/bxCRU9LeMD
— Cointelegraph (@Cointelegraph) February 4, 2025
Crypto.com
has maintained confidence in its products despite the regulatory scrutiny.
“We firmly believe in the legality of our events contracts and believe the
CFTC is the appropriate regulator,” a company spokesperson affirmed,
confirming they will continue offering these contracts while cooperating with
the agency.
The
investigation has broader implications for the growing event contracts market.
The CFTC’s January vote to place Crypto.com’s sports contracts under special
regulatory review highlighted the agency’s concerns about whether such products
serve the public interest.
Robinhood Offers Super
Bowl Event Contracts Too
Despite the
regulatory uncertainty, the market continues to grow. Robinhood’s entry marks a
significant expansion, offering its derivatives clients the ability to trade on
either the Kansas City Chiefs or Philadelphia Eagles through Kalshi’s exchange .
“Available
in all 50 states through KalshiEX LLC, a regulated exchange, the Pro Football
Championship event contract gives eligible customers the power to trade on the
outcome of the big game,” the company commented in an official announcement
yesterday (Monday).
Kalshi 🤝 Robinhood
Today is a big day: Kalshi launches its first broker, Robinhood.
25 million more people now have exposure to our prediction markets. pic.twitter.com/GW2HzU4tJr
— Tarek Mansour (@mansourtarek_) February 3, 2025
It’s worth noting that these are not the first contracts of this kind offered by Robinhood. In October of last year, the company introduced similar instruments that allowed users to predict the winner of the US presidential election. The question now is whether this is still trading or if it has crossed over into sports betting or even outright gambling.
The exact
same contracts have also appeared in the offerings of some FX and CFD brokers.
One of them is FOREX.com, which has indicated plans to offer similar solutions
in the future.
Regulations
The timing
of these developments is particularly notable, as they come just days after
significant political changes, including the recent presidential transition,
which could influence the regulatory landscape for these innovative financial
products.
The core
issue revolves around the classification of sports contracts as gaming under
the Commodities Exchange Act. The outcome of this regulatory review could set
important precedents for the future of sports-based financial products and
their accessibility to retail investors.
Kalshi is a CFTC-regulated financial exchange that lets people trade on event outcomes through binary contracts. Founded in 2018 by Tarek Mansour and Luana Lopes Lara, the platform received official CFTC approval in late 2020. These contracts pay out either $1 if an event occurs or $0 if it doesn’t, and they can cover economic indicators, weather patterns, political outcomes and sports events.
The
Commodity Futures Trading Commission (CFTC) has launched an investigation into
Super Bowl-related event contracts offered by Crypto.com and Kalshi, questioning
their compliance with derivatives regulations as the market for sports-based
trading products expands rapidly.
Interestingly,
on Sunday, another major player in the retail trading arena—Robinhood—launched
the exact same contracts in partnership with the event contracts exchange.
This raises the question of whether it might soon fall under the
regulator’s scrutiny.
The CFTC’s
investigation centers on whether these sports-focused event contracts qualify
as gaming under existing regulations. The agency is particularly interested in
how these products comply with derivatives rules and whether they’re
susceptible to market manipulation.
“We
are continuing to review the contracts in accordance with our
regulations,” a CFTC spokesman stated, noting that the agency plans to
hold public roundtables on emerging issues in derivatives markets, including
event contracts.
🇺🇸 LATEST: The US CFTC is reportedly investigating Super Bowl markets offered by Crypto. com and Kalshi, asking them how they comply with derivatives rules. pic.twitter.com/bxCRU9LeMD
— Cointelegraph (@Cointelegraph) February 4, 2025
Crypto.com
has maintained confidence in its products despite the regulatory scrutiny.
“We firmly believe in the legality of our events contracts and believe the
CFTC is the appropriate regulator,” a company spokesperson affirmed,
confirming they will continue offering these contracts while cooperating with
the agency.
The
investigation has broader implications for the growing event contracts market.
The CFTC’s January vote to place Crypto.com’s sports contracts under special
regulatory review highlighted the agency’s concerns about whether such products
serve the public interest.
Robinhood Offers Super
Bowl Event Contracts Too
Despite the
regulatory uncertainty, the market continues to grow. Robinhood’s entry marks a
significant expansion, offering its derivatives clients the ability to trade on
either the Kansas City Chiefs or Philadelphia Eagles through Kalshi’s exchange .
“Available
in all 50 states through KalshiEX LLC, a regulated exchange, the Pro Football
Championship event contract gives eligible customers the power to trade on the
outcome of the big game,” the company commented in an official announcement
yesterday (Monday).
Kalshi 🤝 Robinhood
Today is a big day: Kalshi launches its first broker, Robinhood.
25 million more people now have exposure to our prediction markets. pic.twitter.com/GW2HzU4tJr
— Tarek Mansour (@mansourtarek_) February 3, 2025
It’s worth noting that these are not the first contracts of this kind offered by Robinhood. In October of last year, the company introduced similar instruments that allowed users to predict the winner of the US presidential election. The question now is whether this is still trading or if it has crossed over into sports betting or even outright gambling.
The exact
same contracts have also appeared in the offerings of some FX and CFD brokers.
One of them is FOREX.com, which has indicated plans to offer similar solutions
in the future.
Regulations
The timing
of these developments is particularly notable, as they come just days after
significant political changes, including the recent presidential transition,
which could influence the regulatory landscape for these innovative financial
products.
The core
issue revolves around the classification of sports contracts as gaming under
the Commodities Exchange Act. The outcome of this regulatory review could set
important precedents for the future of sports-based financial products and
their accessibility to retail investors.
Kalshi is a CFTC-regulated financial exchange that lets people trade on event outcomes through binary contracts. Founded in 2018 by Tarek Mansour and Luana Lopes Lara, the platform received official CFTC approval in late 2020. These contracts pay out either $1 if an event occurs or $0 if it doesn’t, and they can cover economic indicators, weather patterns, political outcomes and sports events.
