Crypto-friendly lawmaker Rich Torres said the U.S. Commodity Futures Trading Commission should be careful about regulating election markets after a judge ruled against the agency.
Election markets have existed for years but are on “unsafe and unregulated exchanges,” the New York Democrat said in a letter to CFTC Chairman Rosten Benham on Thursday. Politico I was the first to report this news.
“In light of this, the CFTC should embrace and anticipate the ruling,” Torres wrote. “We encourage them to focus on promoting responsible innovation, regulating exchanges, protecting consumers, and protecting the sanctity and integrity of our elections from illegal and unregulated actors.”
Judge Zia M. Cobb of the United States District Court for the District of Columbia Rule The CFTC said on Thursday that it had exceeded its authority when it opposed prediction market Kalshi’s move to list contracts related to the U.S. election. CFTC Appealed In its ruling and hearing later Thursday, the court warned that the election contract could “undermine confidence in the fairness of elections.”
The Kalshi website currently has a banner that says, “Trading on elections.kalshi.com is suspended pending court proceedings.” The CFTC said last year that Calci could not provide contracts related to “congressional control contracts.” Calci sued the agency in November 2023.
Torres urged the CFTC to consider allocating resources to regulated entities to protect consumers and the integrity of elections from “illegal and unregulated election markets.”
“I also encourage the CFTC to assess the resources that additional court action would consume and the broader harm that additional delays could cause to election integrity and consumer protection,” Torres wrote. “Delays could allow illegal and unregulated markets to continue to gain market share.”
Event markets like Kalshi and Polymarket allow users to bet on the outcome of future events, such as the upcoming US election or when a particular Taylor Swift album will be released. Kalshi is regulated by the CFTC, while other markets like Polymarket do not operate in the United States.
CFTC Chairman Behnam warned that there has been a “significant increase” in event contracts trading on CFTC-registered exchanges since 2021. CFTC I voted As the political event betting market rapidly expanded ahead of November, a rule was proposed in May to ban betting on political events.
The CFTC did not respond to a request for comment.
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