Dragonfly joins Crypto.com and Coinbase in opposing CFTC's proposed ban on prediction markets

"Political event contracts should not be equated with betting activities such as the Super Bowl," Jessica Furr of Dragonfly Digital Management and Bryan Edelman, a consultant, wrote to the CFTC. "Elections have significant economic implications and these contracts are designed to provide critical risk hedging, comply with the requirements of the Commodity Exchange Act (CEA) and provide the public with valuable predictive data."
Dragonfly also argued that the CFTC's proposed rule overstepped its authority by broadly prohibiting market forecasts that had not been properly evaluated, particularly in light of the Supreme Court's recent Chevron decision, which limited the CFTC's power to interpret without congressional authorization.
In addition, Joseph Fishkin, a law professor at the University of California, Los Angeles (UCLA), also points out that prediction markets provide valuable insights into public opinion and political events, and should not be regulated in a way that shuts down prediction markets in the United States. (CoinDesk)
The move comes after the CFTC voted in May to adopt a rule that, if finalised, would ban betting on political races and other sports contracts, which are not allowed to be listed, traded or liquidated through CFTC-registered entities. Earlier this week, Senator Elizabeth Warren urged Rostin Behnam, CFTC chairperson, to finalise the rule banning contracts on political events "quickly".
Steve Humenik, senior vice president and global head of capital markets and law at Crypto.com, and Paul Grewal, chief legal officer at Coinbase, have expressed opposition.