The vibrant landscape of cryptocurrency and related enterprises in the United States continues to flourish. One of the most contentious crypto-related topics during election periods has been event contracts. Notably, the Commodity Futures Trading Commission (CFTC) initially pursued legal actions against ventures like Polymarket but did not achieve its intended outcomes. Today, the CFTC has taken a significantly different stance.
CFTC Eases Event Contract Requirements
The CFTC’s Division of Market Oversight and Division of Clearing and Risk have decided to abstain from certain enforcement actions regarding event contract requirements. Responding to requests from QCX LLC and the derivative clearing organization QC Clearing LLC, the futures regulator has chosen to show leniency regarding problematic prerequisites.
Key requirements eliminated include swap data reporting and swap recordkeeping. The removal of these barriers paves the way for platforms akin to Polymarket to operate seamlessly within the United States. Concurrently, Shayne Coplan, the founder of Polymarket, announced CFTC’s approval for Polymarket to initiate operations in the US.
The official CFTC non-action notice reads as follows:
“The Division of Market Oversight and the Division of Clearing and Risk of the Commodity Futures Trading Commission today announced they have taken a non-action position on swap data reporting and recordkeeping requirements for event contracts. This is in response to a request from QCX LLC, a designated contract market, and QC Clearing LLC, a derivatives clearing organization. The divisions will not recommend enforcement actions against the entities or participants for not complying with certain clearing-related recordkeeping requirements and not reporting data to swap data repositories concerning binary options transactions and variable pay-out contract trades conducted at or under the rules of QCX LLC and cleared through QC Clearing LLC. The letter is only applicable under narrow circumstances and is comparable to non-action letters issued to other similarly positioned designated contract markets and derivatives clearing organizations.”
Liberty for Cryptocurrencies
This move echoes former President Trump’s promise to liberate cryptocurrencies, a commitment the new US leadership has facilitated by implementing necessary measures. The Senate and House of Representatives are enacting crypto-focused legislation. The SEC is issuing guidelines to ease operations for cryptocurrency companies. Notably, under Gensler, the SEC’s stance had become notably stringent, but in the new era, it’s even declaring that categories such as meme coins are “not securities.”
These developments are pivotal for the global acceptance of cryptocurrencies. Establishing a legal framework essential for the long-term growth of cryptocurrencies is a very positive move.
