Paradigm, an investment firm led by Coinbase co-founder Fred Ehrsam, is supporting prediction markets platform Kalshi in its clash with U.S. regulators, according to a recent court filing.
The Commodity Futures Trading Commission issued an order in September disapproving Kalshi’s contract that would have allowed him to bet on which political party will control the U.S. Congress for the next term. Proverb This included “gaming and activities that are illegal under state law.”
Two months later, Calci sued the regulator, saying the agency had exceeded its authority.
“Kalshi is not a cryptocurrency company, but we felt it was necessary to intervene in this case because we believe prediction markets are one of the potentially revolutionary use cases for cryptocurrencies,” Paradigm said. post On Monday.
betting expert
Paradigm explained that this is highly relevant information for cryptocurrency companies as political events determine the future regulation of the industry. Watching people bet on specific outcomes could help cryptocurrency companies adjust their corporate strategies and avoid regulatory risks, the companies said in an amicus brief filed in the U.S. District Court for the District of Columbia.
“The likelihood that Congress will pass legislation affecting the viability of U.S.-based cryptocurrency startups is directly affected by which political party controls Congress or whether the government is divided,” Paradigm said in a blog post. said.
Prediction markets can predict election results better than public opinion polls because participants must have their own skin in the game. Paradigm wrote In an amicus brief. This argued that products like the one introduced by Kalshi are useful not only for cryptocurrency entrepreneurs but also for the general public.
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About the author
Anna is a senior policy reporter at The Block. She has a background in political journalism and has covered Russian civil society for various media outlets in Moscow, including her award-winning newspaper, Novaya Gazeta. Before joining The Block, Anna spent the past five years researching global cryptocurrency policy and adoption at CoinDesk. Anna says she owns Bitcoin and gift NFTs that have sentimental value.