Crypto.com Rejects Regulators’ Request To Stop Super Bowl Trading

Crypto.com, the Singapore-based cryptocurrency exchange that also offers financial trading, has refused a request by the US Commodity Futures Trading Commission to suspend all trading of sports-related contracts, including the Super Bowl.

Trading Will Go Uninterrupted

The distinction between wagering and trading contracts through a financial institution has become blurred recently, and the federal regulatory body overseeing financial transactions in the United States, the Commodity Futures Trading Commission (CFTC), wants a halt to all of it while legal arguments are being presented.

However, that request has gone unheeded as a Crypto.com spokesperson relayed the company’s stance in an emailed statement, saying, “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. 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 lines between sports betting and financial trading continue to be blurred. The contracts one purchases at Crypto.com and other similar platforms are financial instruments whose price fluctuates, much like commodities trading, whereas odds and point spreads are locked in the moment a wager is made at traditional sportsbooks. The CFTC wants to investigate these differences and determine if a sports betting offering passes muster as a financial instrument being traded on the open market.

Election Battle Being Waged

A recent court battle between another trading platform, Kalshi, and the CFTC found that election betting did not come under the province of “gaming,” and it was not an unlawful activity, which meant the regulatory agency had no jurisdiction in triggering a “special rule” allowing for CFTC review.

The CFTC appealed that lower court ruling and it is now in the U.S. Court of Appeals for the D.C. Circuit, where the regulatory agency is hoping for a more favorable ruling. However, it should be noted that there will be at least two significant changes at the agency as the Trump administration takes over.

The agency’s director of its division of enforcement, Ian McGinley, will depart on January 17th, only weeks before the CFTC chair, Rostin Benham, will leave on February 7th of this year. Therefore, a new administration will be charged with pursuing the legal narrative set forth by the current administration or opting to allow it.

Rob Schwartz, general counsel for the CFTC, said last week that “to build and maintain a thriving derivatives industry that is distinct from the gambling business has been the work of 175 years.”