- The CFTC said firms should not use broad template filings for event contracts.
- Closely related event contracts may still be certified together with shared exhibits.
- The agency also extended the dormant status of Kraken Derivatives Exchange.
The U.S. Commodity Futures Trading Commission issued a new warning to prediction market businesses about how they submit event contracts for regulatory review. The notice applies to a growing market that includes companies such as Kalshi, Coinbase, Polymarket and Crypto.com. According to the agency, some designated contract markets are still self-certifying products through broad templates instead of providing the details required for each proposed version. The CFTC said this approach can limit its ability to examine product terms, settlement methods, data sources and regulatory compliance. The advisory arrived as event contracts continue to expand across sports and political markets while broader legal questions about oversight remain unresolved.
CFTC warning on event contracts filings
On Friday, the CFTC said firms should not attempt to shorten the certification process by using sweeping filings designed to cover many possible products at once. The agency stated that broad, template-style certifications should not be submitted and noted that this was its second recent warning about filings that were considered too generalized.
The regulator said some designated contract markets continue to self-certify event contracts without providing the specific terms and conditions for each proposed variation. According to the advisory, those submissions may also lack a concise explanation and supporting analysis of the product terms, the underlying commodity and compliance with applicable regulatory requirements. The CFTC argued that these omissions make it harder to conduct a proper review.
Detailed regulatory review remains essential
The CFTC said incomplete submissions can weaken its ability to determine whether a firm has provided all the information, explanations and analysis required under its rules. Broad filings may also prevent the regulator from fully evaluating settlement methodologies, data sources and compliance with core principles across every proposed version of the contracts.
However, the agency did not reject every form of combined filing. Closely related event contracts may still be certified as a class when companies provide sufficient details and use shared exhibits appropriately. The advisory therefore distinguished legitimate grouped submissions from overly broad templates that attempt to cover numerous possible products without explaining their individual structures.
Event contracts face legal uncertainty
The market for event contracts has expanded rapidly, particularly in sports-related products and contracts tied to political outcomes. However, parts of the industry remain relatively inexperienced, while the CFTC’s legal authority over certain prediction market products continues to face questions and challenges.
That uncertainty also affects the agency’s broader position that it is the primary regulator of prediction markets. Courts may ultimately need to determine how federal commodities law interacts with state gambling regulations. CFTC Chairman Mike Selig has made it a priority to argue in state and federal courts that the agency has exclusive authority over event contracts platforms.
Several states have taken a different position. State regulators have accused some prediction market companies of offering illegal sports gambling products that should be licensed and supervised at the state level. The disagreement has created an unsettled regulatory environment in which companies may face both federal oversight and legal challenges from individual states.
Kraken platform status also extended
Also on Friday, the CFTC issued a separate notice involving Kraken’s platform, Kraken Derivatives Exchange. The platform has operated under a dormant designation, and the regulator agreed to extend that status after the company requested additional time to determine how it intends to use the registered exchange.
The source said the last trade on the platform took place in early 2025. According to the CFTC, extending the dormant designation allows the registered entity to remain positioned for a possible return to active operations without immediately abandoning its regulatory status or existing infrastructure.
Kraken said it needed more time to evaluate its next steps after acquiring Bitnomial earlier this year. The extension gives the company additional flexibility as it assesses how the exchange could fit into its broader derivatives strategy and whether renewed trading activity would be commercially and operationally appropriate.
Conclusion
The latest CFTC advisory signals that the agency expects prediction market firms to submit more precise information when bringing event contracts to market. Its central message was that broad templates do not provide enough detail for a complete regulatory review, although closely related products may still be grouped when companies provide proper terms, analysis and shared exhibits. The warning comes during a period of rapid prediction market growth and continuing legal uncertainty over whether federal or state authorities should oversee certain products. On the same day, the CFTC also extended the dormant status of Kraken Derivatives Exchange, allowing the platform to remain positioned for possible future activity while Kraken evaluates its options following the Bitnomial acquisition.
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