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US regulators are investigating Crypto.com over football futures trading

In this post:

  • The CFTC is looking into Crypto.com’s football futures to see if they’re breaking gaming laws.
  • The contracts launched right before Christmas, skipping full regulatory review, and now they’re under the spotlight.
  • Unlike DraftKings, Crypto.com lets people bet nationwide, with contracts capped at $250,000 per trader.

The Commodity Futures Trading Commission (CFTC) is putting Crypto.com under the microscope over its Super Bowl and sports-related derivatives contracts.

These contracts, launched on December 23, are being reviewed to see if they violate federal rules against gaming. The agency announced on Tuesday that it asked Crypto.com to pause trading on these contracts during its 90-day review, which could end with a permanent ban.

These contracts cover everything from Grammy winners and weather forecasts to political elections and even the fate of an accused assassin.

The CFTC and Kalshi Inc., another predictions market, are headed to federal court on Friday to fight over whether trading on political events is gaming, gambling, or something else entirely.

CFTC weighs legality of football bets

Crypto.com first submitted its filings for the football contracts on December 19. Legally, the CFTC gets one business day to review such filings before trading can start, but with the holidays and a looming government shutdown, regulators didn’t have time to act. Now with scrutiny mounting, questions are being raised about whether the contracts align with U.S. gaming laws.

“This isn’t a decision the current leadership of the CFTC should be making,” a Crypto.com spokesperson said, expressing frustration that the issue is being addressed so close to a leadership transition at the agency.

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Crypto.com isn’t the only firm facing such challenges. Back in 2021, ErisX introduced similar contracts, but they withdrew their proposal before the CFTC could vote to ban them. Crypto.com’s contracts, however, are live—and causing quite a stir.

On its app, Crypto.com allows users to bet on the Super Bowl or AFC championship, listing options like “hometown celebration” to describe contracts tied to team victories.

These contracts are priced at $100 each, with individual traders capped at 2,500 contracts or $250,000 in notional value. Market makers though, can hold up to 250,000 contracts.

Nationwide reach shakes up the market

Crypto.com’s move into sports betting is a direct challenge to traditional platforms like DraftKings and FanDuel, which operate state by state. Crypto.com sidesteps that limitation by offering trading across all 50 states.

While sportsbooks set odds and take on the financial risk of payouts, Crypto.com simply facilitates trades between two parties and collects a small fee. The platform’s contracts add to a crowded but fragmented market.

Mobile sports betting is legal in 30 states and Washington, D.C., with unregulated platforms like Polymarket also allowing bets on events like the Super Bowl. But Crypto.com’s nationwide reach has raised eyebrows among both competitors and regulators.

The CFTC has long been wary of contracts tied to sports, war, assassination, and other prohibited activities. However, a recent legal decision in late 2024 opened the door for regulated exchanges to offer political prediction markets, indirectly granting a pathway for contracts like Crypto.com’s football futures.

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Nick Lundgren, Crypto.com’s Chief Legal Officer, defended the contracts, saying, “Having CFTC oversight ensures market integrity, manipulation controls, and availability in all 50 states.”

Regulatory uncertainty ahead

The CFTC’s stance on event contracts remains very uncertain. In 2024, the agency drafted—but never finalized—a rule defining “gaming” in such markets. This proposed rule would have banned trading on politics, sports, and other events deemed “against public interest.”

Rostin Behnam, the outgoing CFTC chairman, recently commented on the issue, saying, “The line between what’s legal and illegal, what’s permitted and impermissible, is getting blurrier. This moves us far from the original purpose of derivatives markets.”

Behnam is stepping down on January 20 and leaving the commission entirely on February 7. His departure comes just as President Trump’s administration, which is expected to take a more crypto-friendly approach, prepares to appoint new leadership.

The president is yet to name Behnam’s successor though, but everyone’s expecting a pro-crypto figure. That’s just how Trump rolls now.

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Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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