September 20, 2024
U.S. Election Betting: CFTC, Kalshi Grilled by Judges in Appeals Court
In a recent appeals court hearing, the CFTC and prediction-betting platform Kalshi faced tough questions about the legality of political prediction markets. The CFTC opposed a ruling allowing Kalshi to offer contracts on congressional control, arguing it could lead to market manipulation and undermine democracy.
Judges expressed skepticism towards both sides, questioning the clarity of event contracts. CFTC General Counsel Rob Schwartz called the prior ruling "seriously flawed," while Kalshi's attorney, Yaakov Roth, argued that regulated markets would reduce manipulation risks. The case has drawn significant attention from crypto firms amid concerns over regulatory impacts on political betting in the U.S.
The CFTC's consideration of political prediction markets could affect cryptocurrencies like Shiba Inu (SHIB) and Sandbox (SAND) in several ways:
Increased Acceptance: If political prediction markets are legalized, it could create a positive environment for crypto projects, including SHIB and SAND, as they may be integrated into prediction or betting platforms.
Market Sentiment: The CFTC's decision could influence investor sentiment. If the market feels optimistic, the prices of SHIB and SAND could rise. Conversely, uncertainty about regulations might cause concern and lead to price drops.
Stricter Regulations: Increased regulation from the CFTC could impact how crypto projects operate, potentially requiring SHIB and SAND to adjust their business strategies to comply with new rules.
Competition with Other Platforms: If unregulated prediction platforms gain traction, SHIB and SAND may face competition from international platforms that are not bound by U.S. laws, affecting their growth.
