CFTC mulling review of Crypto.com futures contracts linked to Super Bowl bets: report

The CFTC is voting on whether to subject Crypto.com futures contracts, which allow investors to bet on who will win major football games, including the Super Bowl, to undergo a 90-day review.

The five-member federal commission is considering whether to investigate Crypto.com over future contract trades that allow investors to bet on the outcomes of major sporting events, according to Bloomberg reporting Jan. 14, according to people familiar with the matter.

The CFTC has not yet determined whether the contracts listed on the firm’s Chicago-based derivatives exchange violated laws governing betting contracts. The agency has long opposed contracts that allow investors to bet on the outcomes of sporting events, wars, assassinations and other activities that distort the public interest.

Crypto.com announced the release of sports contracts on January 7, after following legal procedures, and warned the CFTC that new contracts would begin on December 19, just two days before Christmas. However, the agency did not have time to review the contracts because they were delivered before the holidays.

A spokesperson for Crypto.com said the firm initially did not plan to launch its new product during the holidays but decided to move forward due to fears of a prolonged government shutdown that could cause it to miss trading opportunities for the Superbowl. Bloomberg.

A spokesperson for Crypto.com claimed that the firm had not been notified of any pending action by the CFTC.

“It is disappointing that current and soon-to-be departing CFTC leadership is considering this action without allowing incoming CFTC leadership to decide how free markets will operate under their direction,” the spokesman said.

On the other hand, a CFTC representative declined Bloomberg’s request for comment on this issue.

In Crypto.com’s new sports contracts, the games are not explicitly mentioned by official names on the company’s website or social media posts; it is simply called “Bowl games,” “Pro Football Conference Championship” and “College Football Championship.” However, the app does display official game names, allowing users 18 and over to bet on the AFC championship or Super Bowl results.

In 2021, crypto trading platform ErisX introduced a similar offer for sports-related contracts. However, the exchange withdrew the application before the agency could vote to reject it.

The sports betting market in the US is currently dominated by platforms like FanDuel and DraftKings, as well as old-school sports betting sites in the country. Mobile sports betting is actually allowed in 30 states, including Columbia in Canada.

Polymarket, an unregulated exchange, allows trading for Super Bowl results as well as many other sports matches. It claims that these contracts are inaccessible to US users.

Last December, the CFTC tightened bets on Kalshi.Inc and other exchanges on whether Luigi Mangione, the alleged assassin of UnitedHealthcare CEO Brian Thompson, would plead guilty to murder.