Gemini urges CFTC withdraw its event contracts proposal claiming that it exceeds the commission’s power.
While the proposal intends to ban all event contracts in the US, Gemini highlights its consequences.
Coinbase also urged the commission to reconsider its decision to ban prediction markets.
Gemini, a prominent American-based crypto exchange, has recently criticized the Commodity Futures Trading Commission’s (CFTC) Notice of Proposed Rulemaking, urging them to withdraw it. While the proposal intends to ban all event contracts in the US, Gemini pinpointed the consequences of such a move.
Both Tyler Winklevoss and Cameron Winklevoss, the co-founders of Gemini, raised their voices against the CFTC’s rules against crypto prediction markets like Polymarket. While Polymarket is acknowledged as one of the leading prediction market platforms, Tyler Winklevoss asserted that the public should not be denied access to such platforms.
The @CFTC should withdraw its Proposed Rule on event contracts, which would categorically ban all event contracts in the U.S., like those traded on @Polymarket, the world’s largest prediction market. Americans should not be denied access to these powerful markets. https://t.co/hAOmemheMO
— Tyler Winklevoss (@tyler) August 10, 2024
The matter could be traced back to the CFTC’s event contracts proposal issued in May 2024. The proposal clearly rejected prediction market trading, receiving support from three Democratic commissioners. As per Gemini’s letter, the proposal is vague and could seriously impact the crypto environment.
In an X post, Cameron Winklevoss elucidated the negative implications of the CFTC’s rule. Highlighting the importance of the decentralized prediction markets, he stated that they are a “significant innovation with real public utility.” Sharing insights on the recent growth of prediction markets, he asserted that they promise greater access, liquidity, and aggregation.
Decentralized prediction markets are a significant innovation with real public utility. They provide valuable information on future events that is rooted in financial accountability. Unlike polls, pundits, or expert opinions, they require participants to put their money where… pic.twitter.com/Il9tiEyQqW
— Cameron Winklevoss (@cameron) August 10, 2024
While urging the commission to withdraw its proposal to ban prediction markets, he questioned their authority to create such laws. Providing more clarity to his statements, Cameron illustrated this with the Supreme Court ruling in Loper Bright Enterprises v. Raimondo, where the court ruled against the regulatory agencies’ rulemaking power. He added that the event contracts proposal is beyond the CFTC’s power and it “exceeds the legal authority that Congress granted the Commission.”In related news, Coinbase, a leading crypto exchange, wrote a letter against the same proposal, demanding the regulators’ reconsideration. Coinbase’s arguments were focused on the inconsistency in the CFTC’s statements, especially regarding the definition of “gaming.” While the CFTC classified Nobel Prizes and Oscars as gaming, Coinbase opposed it by claiming they are by no means gaming. While questioning the commission’s statutory authority, Coinbase slammed them by stating that they failed to acknowledge the public demand and benefits of prediction markets.
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