Key Takeaways:
Hyperliquid Policy Center and Multicoin Capital on Monday backed the CFTC's proposed rules for prediction markets, seeking federal oversight and public justification for contract reviews under a new three-step analytical framework.
"Clear federal rules reduce the regulatory uncertainty that has kept institutional capital on the sidelines," the Hyperliquid Policy Center said in a statement. "The proposed framework provides a transparent process for determining which contracts serve the public interest."
The CFTC's proposed amendments, which had a Monday comment deadline, establish a three-step framework to evaluate event contracts based on their involvement in activities including terrorism, assassination or gaming. The agency issued a second warning this year on March 12 against cookie-cutter self-certifications, telling prediction markets to stop submitting overly broad template-style certifications without supplying terms and conditions for each proposed permutation.
The rule, if adopted, would fundamentally reshape the regulatory landscape for prediction markets, according to law firm Ropes & Gray. Clearer federal oversight could legitimize the sector and drive capital inflows to platforms such as Polymarket, while reducing the legal risk that has historically constrained product development in the US.
Industry support for clearer rules
Multicoin Capital, a venture firm with holdings across crypto prediction platforms, said the proposed framework would provide legal clarity for developers building event contracts on blockchain-based markets. The CFTC's advisory clarified that platforms retain the ability to self-certify event contracts as compliant with the Commodity Exchange Act without prior commission approval, subject to the existing statutory framework.
The agency warned that broad, template-style certifications should not be submitted, reiterating that each proposed contract permutation requires a concise explanation and analysis of the product's terms and conditions, the underlying commodity, and compliance with the law.
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