(Bloomberg) — The Commodity Futures Trading Commission is asking Crypto.com and Kalshi Inc. to explain how their recently launched Super Bowl event contracts comply with derivatives regulations.
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The agency is allowed by statute to request additional information from companies that “self-certify” their financial products, including demonstrating that they aren’t readily susceptible to manipulation and meet other regulatory requirements. It can evaluate the responses and decide whether to take any enforcement actions or begin drafting a new rule.
“We are continuing to review the contracts in accordance with our regulations,” a CFTC spokesman said in an email. The agency announced last week that it would hold public roundtables on emerging issues in derivatives markets — including event contracts.
Crypto.com expressed confidence in its products and said it will respond to the agency.
“We firmly believe in the legality of our events contracts and believe the CFTC is the appropriate regulator to bring federally regulated market integrity, manipulation controls and product availability in all 50 states,” it said in a statement from a spokesperson. “We will continue to offer these contracts while we work with the CFTC.”
The regulator voted in January to put Crypto.com’s sports contracts under a special regulatory review to determine if they qualified as gaming, one of the categories that draw additional scrutiny over whether certain contracts are in the public interest. Crypto.com recently withdrew the two filings under review, and self-certified a new contract related to spectator sports and related industries, according to public agency filings.
It isn’t clear if the agency will continue its original review of the initial sports contracts.
Kalshi’s contracts, launched three days after President Donald Trump’s inauguration, weren’t put under a similar review.
A representative for Kalshi declined to comment.
Caught Off Guard
Late last year, Crypto.com started offering sports-related event contracts, a type of derivatives contract that lets traders wager on a yes-or-no outcome on questions such as whether the Kansas City Chiefs or the Philadelphia Eagles will win the Super Bowl. The CFTC was caught off guard by the Dec. 23 launch.
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