Crypto.com Slams Brakes on Retail Sports Bets—But Market Makers Get the Green Light
Crypto.com just threw a regulatory curveball. The exchange is dialing back retail access to live sports betting, a move that tightens the reins on everyday punters looking to wager crypto on the big game.
The Whales Keep Playing
Here's the kicker: market makers—the institutional heavyweights who provide liquidity—get a full exemption. They'll keep trading these instruments while retail faces new restrictions. It's a classic case of one rule for the street, another for the suite.
Reading Between the Regulatory Lines
The shift isn't happening in a vacuum. Global watchdogs are sharpening their focus on crypto derivatives and leveraged products. Crypto.com's pivot looks like a pre-emptive strike, adjusting sails before the regulatory storm hits. A smart play for long-term survival, even if it ruffles some user feathers today.
The Bottom Line for Your Bag
For the average trader, it's a reminder: the 'wild west' days are fading. Platforms are prioritizing compliance over unbridled growth. For the cynics? It's just finance doing what it does best—protecting the house while telling everyone else it's for their own good.
Kalshi files for order delays
Crypto.com is not the only platform moving in this direction. Kalshi Inc., another major prediction market exchange, has submitted its own paperwork to regulators that WOULD allow it to delay certain orders moving through its system.
The proposal now sits inside a ten‑business‑day review window at the CFTC. The filing does not spell out which customers would face the slowdown or whether some users would be exempt. If the regulator raises no issues during the review, the delay could take effect as soon as this week.
The push for delays arrives as prediction markets expand fast, driven in large part by heavy trading around sports games. These venues want deeper liquidity and tighter pricing, and that depends on attracting large market‑making firms.
Delays reduce risk for those firms when prices MOVE in bursts. Similar policies in equities and derivatives trading have drawn pushback in the past. Critics said rules favoring high‑speed firms weakened claims of equal access.
If prediction markets follow that same playbook, their argument of a level playing field against traditional sportsbooks faces new pressure.
Delays target courtsiders
Three seconds look small on paper. In live betting, it can decide everything. One score or one injury can swing prices before most screens refresh.
Alfonso Straffon, a consultant who previously worked as a sports trader and gaming research analyst at Deutsche Bank AG, tied the new delay to courtsiding.
The practice involves betting from inside a venue before sportsbooks and exchanges update odds for the wider market. Alfonso said, “This three‑second delay really protects market makers from courtsiders or even individuals that correctly anticipate a sudden, market‑wide move in the odds.”
The delay on Crypto.com applies to all non‑market‑making customers, not only those trying to exploit courtsiding. That structure favors large liquidity firms trading at scale.
Susquehanna International Group and Jump Trading both actively operate on Kalshi. Kalshi also runs an internal market‑making unit on its own exchange.
That unit now faces a proposed class action lawsuit from retail traders who accuse the company of making money by betting against its own users.
Kalshi co‑founder Luana Lopes Lara said in a recent social media post that the trading arm is walled off under separate management and receives “no preferential treatment” on the platform.
Claim your free seat in an exclusive crypto trading community - limited to 1,000 members.
