Crypto.com Senior Vice President Steve Humenik has joined Coinbase by voicing opposition to a proposed rule change by the Commodity Futures Trading Commission (CFTC) that could lead to the prohibition of prediction markets in the United States. In a letter to the CFTC, Humenik expressed concerns about the implications of the proposed regulation, urging the Commission to reconsider its approach.
Crypto.com Opposes Proposed US Ban on Prediction Markets and Event Contracts
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Crypto.com’s SVP Joins Industry Voices Against CFTC’s Proposed Event Contract Ban
In a detailed letter to the Commodity Futures Trading Commission (CFTC) dated August 8, 2024, Steve Humenik, senior vice president of Crypto.com and global head of capital markets and legal, articulated his strong opposition to the CFTC’s proposed rule that could potentially ban prediction markets and event contracts in the United States. Like Coinbase, Humenik argued that the proposed rule is overly prescriptive and exceeds the CFTC’s statutory authority.
He emphasized that the current process for reviewing and approving event contracts, as set out in existing CFTC regulations, is sufficient and should not be altered. Humenik stated:
We urge [the CFTC] not to finalize this proposed rule as written, and to consider withdrawing it altogether.
Humenik pointed out that the Commodity Exchange Act (CEA) outlines a three-step process for the evaluation of event contracts, a process he believes the CFTC is bypassing with the new proposal. He stressed the importance of the Commission adhering to this process, particularly in determining whether a contract involves an “excluded commodity.” Humenik urged the CFTC to be transparent in its decision-making and to avoid categorically prohibiting entire classes of event contracts without a thorough, individualized review.
Furthermore, Humenik recommended that the CFTC seek clarification from Congress regarding ambiguities in the CEA, specifically concerning a reference that appears to be a drafting error in the statute. He concluded by expressing support for effective regulation of derivatives markets but insisted that any changes to the regulation of event contracts should be principles-based and rooted in existing legal frameworks unless otherwise directed by Congress.
What do you think about the letter to the CFTC from the Crypto.com SVP? Share your thoughts and opinions about this subject in the comments section below.
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