Gemini and Coinbase Challenge CFTC’s Rule Targeting Decentralized Election Prediction Markets

• Gemini and Coinbase oppose CFTC’s rule, highlighting the value of decentralized prediction markets in fostering transparency.
• Cameron Winklevoss defends prediction markets, urging the CFTC to reconsider the ban, emphasizing public benefits through accountability.
• U.S. lawmakers push the CFTC to ban election betting, fearing it could harm democracy, while the CFTC debates its role in election integrity.

Gemini is pleading with US regulators to back off from a proposed rule that would have prohibited any event contracts on decentralized prediction markets. If this rule were put into effect, it would have a negative effect on websites like Polymarket, which are essential for predicting events like elections.

Gemini wrote to U.S. Commodity Futures Trading Commission (CFTC) secretary Christopher Kirkpatrick on August 8, expressing concerns. The letter emphasized that the new legislation would be detrimental, especially to prediction markets.

Co-founder of Gemini Cameron Winklevoss expressed his rage as well, emphasizing the value of cryptocurrency forecasting resources in circumstances like these. In contrast to more traditional methods like polls or expert opinion, Winklevoss claims that platforms like Polymarket offer an unmatched level of transparency.

Winklevoss Advocates for Decentralized Prediction Markets

According to Winklevoss, the CFTC ought to re-evaluate its position on outlawing event contracts. He emphasized that by requiring participants to have a financial stake in their judgments, decentralized prediction markets offer public usefulness. He asserted that the process gains legitimacy and accountability from this “skin in the game” approach.

Coinbase has also expressed disapproval of the new rule. Chief legal officer of Coinbase Paul Grewal attacked the CFTC’s proposal, saying it ignores prediction markets’ advantages for the general public. Grewal asked the CFTC to work with partners in academia, business, and politics to create a well-rounded strategy that protects the public interest while fostering innovation.

Lawmakers Push for Election Betting Ban

Furthermore, as pressure on the CFTC increases, the debate gets more heated. Three congressman and five senators from the United States reiterated their demands on August 5 for the CFTC to outlaw wagering on the 2024 presidential election. They contend that these kinds of marketplaces have the ability to erode public confidence in democracy and even tamper with elections.

Under the direction of Chairman Rostin Behnam, the CFTC has highlighted that it is its duty to safeguard the integrity of the democratic process. Behnam countered that the CFTC shouldn’t turn into an “election cop,” arguing that it lacks the authority to control gaming or protect the integrity of the market.