Crypto and Fiat Currency Exchange Banned by CFTC from Taking Bets on US Elections
PredictIt, a cryptocurrency and fiat currency gambling platform that allows Americans to bet on who will be elected to Congress or the next president, has been stripped of its legal power to do business in the United States.
The Commodity Futures Trading Commission (CFTC) has ordered the crypto and political gambling platform to suspend operations for violating the terms of the agreement.
The CFTC withdrew a letter that allowed PredictIt’s license to operate its non-profit online exchange, where users can speculate on the likely outcome of elections and economic events using fiat cash or cryptocurrencies.
Gamblers predict results using Fiat and Crypto
The platform works by allowing players/traders to buy shares in anticipation of a potential outcome; if their prediction is accurate, they receive $1 per share. The site limits bets to $850, or the equivalent stake in crypto.
Since the site was managed by the New Zealand-based Victoria University of Wellington, which provided gambling odds and statistics to academic researchers, the CTFC issued it an emergency letter in 2014.
The CTFC reversed its earlier issuance of a permit last week, stating that the exchange was no longer “a small-scale, non-profit, online marketplace for event contracts in the United States for educational purposes.” Predict It contradicts the statement.
Image: Washington Monthly
The site’s disclaimer said: “Predictit.org is an experimental initiative managed for academic reasons with the authorization of the CFTC.”
The political gambling sector was shaken by the CFTC’s decision to remove the regulatory letter on which the platform relied.
PredictIt given until February next year to operate
The CFTC stated that PredictIt trading of contracts listed in accordance with the 2014 legal interpretation must cease by February 15, 2023. The regulator’s decision did not result in enforcement.
This means citizens can still bet on markets like the 2024 presidential election between former President Donald Trump and Florida Governor Ron DeSantis.
Aristotle Inc. operates PredictIt, which attracts a group of professional gamblers. Aristotle provides technology, data and other services to political campaigns, and voters, members of the media, politicians and researchers rely on PredictIt’s key figures, according to Aristotle.
Political analysts and the mainstream media have relied on prediction markets like PredictIt, although many individuals view the industry with a grain of salt.
Apart from declaring that VUW had not managed the market in accordance with the provisions of the 2014 resolution, the CFTC did not disclose the exact reason for withdrawing the letter.
Crypto, a cornerstone of online gambling
The widespread use of cryptocurrency in online gambling offers several advantages. In our society, the first internet games were launched more than 25 years ago. Since then, online gambling has grown rapidly.
Cryptocurrency-based online gambling platforms are on the rise, operating and marketing with relative impunity despite strict regulations being imposed.
Numerous sites operating outside of the United States now offer an easy method to start gambling without requiring extensive background checks.
Crypto total market cap at $1.11 trillion on the daily chart | Source: TradingView.com Featured image from The Clever PM, Chart from TradingView.com
