CFTC Grants No-Action Relief to Multiple Prediction Markets: A Regulatory Green Light for Crypto’s Next Frontier

Regulators just handed prediction markets a get-out-of-jail-free card—and crypto's betting on what comes next.

The No-Action Nod

The Commodity Futures Trading Commission (CFTC) isn't banning these platforms—it's giving them temporary breathing room. This relief lets multiple prediction markets operate without immediate fear of enforcement, provided they stick to the outlined rules. It's a classic regulatory maneuver: don't approve, but don't destroy.

Beyond Sports and Politics

Forget betting on elections or football scores. The real action is in decentralized finance (DeFi). Traders can now speculate on interest rates, protocol upgrades, or even the outcome of major regulatory decisions—all settled on-chain. It turns market sentiment into a tradable asset.

The Compliance Tightrope

This isn't a free pass. The CFTC's relief comes with strings attached—strict anti-fraud measures, transparency requirements, and customer protections. Platforms walking this line get to innovate; those who stumble face the full force of the law. It's a high-stakes test of decentralized governance.

Wall Street's Ironic Shadow

Traditional finance spends billions on research to predict outcomes. Crypto prediction markets crowdsource the same intelligence for pennies—and often get it right faster. Another case of legacy systems being outmaneuvered by decentralized networks, while still charging clients for 'expert' analysis.

The CFTC's move doesn't legitimize prediction markets—it neutrals them. Regulators get to monitor a risky sector without taking ownership, while innovators get a sandbox. Whether this leads to smarter markets or just sophisticated gambling depends entirely on what gets built next. The bet is now live.

CFTC Signals Flexibility as Prediction Markets Build Compliance Systems

The no-action letters do not change existing law but signal a willingness by regulators to give emerging prediction markets room to operate as they refine their compliance systems.

To qualify for continued relief, the platforms must fully collateralize all contracts, with reserves covering every position in full.

They are also required to publish time-and-sales data for each transaction once it is executed.

These conditions aim to ensure transparency and mitigate counterparty risk, especially in markets that allow trading on outcomes ranging from sports to political events and cultural oddities.

Prediction markets fall under the CFTC’s jurisdiction as designated contract markets, triggering extensive reporting rules that many newer platforms have struggled to meet.

The new relief reduces the threat of immediate enforcement but does not absolve the companies from longer-term compliance expectations.

.@CFTC Staff Issues No-Action Letters Regarding Event Contracts: https://t.co/oelx60JIap

The regulatory pause comes during a standout year for event-driven trading. Prediction markets have surged in popularity throughout 2025, with some platforms posting transaction activity on par with mid-tier crypto exchanges.

Kalshi recorded $5.14 billion in trading volume over the past 30 days, according to DefiLlama, while Polymarket registered $1.9 billion over the same period.

Major crypto firms are also eyeing the space. Crypto.com has launched its own prediction market product, expected to integrate with TRUMP Media, and site code indicates Coinbase is exploring a similar offering.

While the CFTC’s no-action stance offers temporary breathing room, the sector now faces increased expectations to demonstrate transparency, collateral integrity and readiness for full regulatory oversight.

SEC Clears DTCC to Launch Landmark Tokenization Program

Yesterday, the US Securities and Exchange Commission also approved a major step toward blockchain-based securities markets by granting the Depository Trust Company, a DTCC subsidiary, a rare no-action letter.

The decision allows DTC to begin tokenizing Treasuries, index ETFs and assets tied to the Russell 1000 starting in late 2026 on pre-approved blockchains.

Such letters are uncommon, signalling strong regulatory confidence in the framework DTCC proposed and marking a broader shift in the SEC’s approach to blockchain infrastructure.

The SEC has taken a noticeably more open stance toward blockchain initiatives over the past year.

Two decentralized physical infrastructure network (DePIN) projects received similar no-action treatment, and in late September, the agency cleared investment advisers to work with state trust companies serving as crypto custodians.

In August, the agency issued a similar letter to Double Zero, surprising many in the industry and fueling Optimism that the SEC, now led by Chair Paul Atkins, is taking a more measured approach after years of tension under former chair Gary Gensler.