The Commodity Futures Trading Commission (CFTC) is conducting a detailed review of sports contracts introduced by Crypto.com, which launched in December 2024. The contracts, described as cash-settled binary options, allow users to bet on major sports outcomes, such as Super Bowl victories and associated celebrations. Despite the CFTC’s formal request for trading to be paused during its 90-day review period, Crypto.com has opted to continue offering these contracts across all 50 U.S. states.

A spokesperson for Crypto.com, cited by crypto.news, stated: “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.”

This ongoing regulatory scrutiny highlights concerns surrounding the legality of sports event contracts, which fall under stringent CFTC oversight. Specifically, the regulator flagged the contracts under section 5c(c)(5)(C) of the Commodity Exchange Act, citing their alignment with activities enumerated in CFTC Regulation 40.11(a).

Crypto.com Challenges the Request

Crypto.com’s decision to reject the suspension request underscores its dissatisfaction with the timing and basis of the CFTC’s actions. The company criticized the commission’s decision to act before new leadership takes office, stating that the move contradicts recent federal court rulings and existing CFTC statements.

The contracts in question, launched just days before Christmas in 2024, were reportedly self-certified and submitted to the CFTC for approval on December 19. However, the regulator did not complete its review before the contracts were publicly introduced. The delay prompted the agency to initiate its formal evaluation in January 2025, requesting a trading halt until the review concludes.

Crypto.com’s stance mirrors growing tension between event contract platforms and regulators, as the definition of permissible trading in this domain remains contentious. The CFTC has previously scrutinized betting on non-financial outcomes such as elections, weather events, and celebrity awards.

Implications of the Review

The CFTC’s examination could result in a permanent ban on Crypto.com’s sports-related contracts if they are deemed to violate gaming prohibitions. Similar regulatory action has affected other platforms, including Kalshi and Polymarket, as Bloomberg via Yahoo Finance points out. Kalshi, for instance, was required to suspend certain contracts despite a favorable court ruling in 2024 that allowed it to offer election event bets.

Regulatory analysts anticipate increased oversight of event contracts in 2025, particularly as Donald Trump’s administration appoints new CFTC leadership. While some predict a more favorable stance toward event-based trading under the incoming administration, outgoing CFTC Chair Rostin Behnam has cautioned against the blurring lines between legitimate financial products and gambling.

As Crypto.com continues to operate its sports contracts, the final outcome of the CFTC’s review could shape the future of event-based trading in the U.S. The debate underscores the delicate balance regulators must maintain between fostering innovation and ensuring compliance with existing laws.