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CFTC Opens Review on Crypto.com’s Sports Contract Offerings

Robert Linnehan

By Robert Linnehan in Sports Betting News

Published:


NBA: Phoenix Suns at Los Angeles Lakers
Dec 21, 2021; Los Angeles, California, USA; Signage reflecting the transition to Crypto.com Arena at Staples Center. The name change will be official December 25, 2021. Mandatory Credit: Gary A. Vasquez-USA TODAY Sports
  • The Commodity Futures Trading Commission announced a review of Crypto.com’s sports event contract offerings
  • The commission will look at two of the offered sports event contracts
  • The commission has requested Crypto.com pause its offerings on the two contract during the review

The Commodity Futures Trading Commission announced it will review two of Crypto.com’s sports event contract offerings.

Crypto.com, which is regulated by the Commodity Futures Trading Commission (CFTC), announced in December it would allow users to buy “contracts” to determine if teams will win or lose the NFL conference championship, certain college bowl games, and the college football national championship.

The CFTC initiated its review on Dec. 19, 2024, for contracts offered by Crypto.com based on the winner of a league championship and the hometown that will host a championship celebration, such as a parade, for its winning team.

Potentially an Excluded Commodity

The CFTC announced the contracts being offered by Crypto.com may involve a prohibited commodity in CFTC Regulation 40.11(a) and section 5c(c)(5)(C) of the Commodity Exchange Act. This specifically notes that registered entities shall not list for trading or accept contracts that involve “terrorism, assassination, war, gaming, or an activity that is unlawful under any state or federal law.”

The commission requested that Crypto.com cease its trading on these two contract types during the review, but a Crypto.com spokesperson noted in a statement to Sports Betting Dime it would continue to offer the contracts.

“We remain committed to working with the CFTC and will continue to support our customers and the trading of our sports title event contracts in all 50 states without interruption while we review the CFTC’s notification,” the spokesperson said.

Crypto.com’s sports event contract service is similar to other event contracts offered by the company, part of its derivative offerings, which is a CFTC-regulated exchange.

The service allows users to purchase “contracts” for various prices. For example, a current contract on the Kansas City Chiefs to win the Super Bowl is trading for $32.75. Each contract that has a correct outcome returns $100, according to the company.

Because the service is regulated by the CFTC, Crypto.com can offer the contracts immediately to users through every state in the country.

“It is disappointing that the current and imminently departing CFTC leadership would take this action while not allowing the incoming CFTC leadership to determine how free markets operate under its administration. The majority’s decision to apply this rule contradicts recent Federal Court rulings and conflicts with the current Commission’s own statement set forth in its recent rule proposal,” the spokesperson said.

Expanded Offerings from Crypto.com

The company announced its initial offerings, contracts on the winner of the Super Bowl, in December. Last week, the company announced it would expand its offerings, with users able to also buy “contracts” to determine if teams will win or lose the NFL conference championship, certain college bowl games, and the college football national championship.

Because the service is regulated by the CFTC, Crypto.com can offer the contracts immediately to users through every state in the country. The service is not beholden to the sports betting tax rates that operators have to pay in each market they’re licensed, but it is subjected to certain requirements by the CFTC to ensure a regulated market for its traders.

Robert Linnehan
Robert Linnehan

Regulatory Writer and Editor

Rob covers all regulatory developments in online gambling. He specializes in US sports betting news along with casino regulation news as one of the most trusted sources in the country.

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