CFTC Tells Kalshi and Rivals Not to Cut Corners on…

The U.S. Commodity Futures Trading Commission has warned operators of prediction market platforms — including Kalshi, Coinbase, Polymarket and Crypto.com — against submitting generic contract certifications that fail to specify the terms, settlement conditions and legal analysis for each event outcome covered by the filing.

The advisory, released Friday, marks the second time in recent months the agency has addressed the practice of using broad, template-style self-certifications to introduce new event contracts. Under current rules, exchanges may list products without prior direct approval by certifying that they comply with the Commodity Exchange Act and CFTC regulations. But the regulator said some platforms have been submitting filings meant to cover many possible contract variations — such as multiple sporting events, elections or economic indicators — without providing enough detail for staff to evaluate how each individual contract would operate.

“Broad, template-style certifications should not be submitted,” the CFTC stated.

The advisory does not prohibit the grouping of closely related event contracts into a single filing. The agency clarified that such consolidated certifications may be acceptable when contracts share meaningful features, settlement terms, data sources and compliance assessments. The key distinction is whether the filing gives regulators sufficient information to analyze every contract covered. Generic templates that could later be applied to unrelated events are more likely to attract scrutiny.

As prediction markets expand into sports, elections and other real-world outcomes, the certification dispute adds another layer of complexity. CFTC Chairman Mike Selig has made federal oversight of event contract platforms a priority, arguing in court that CFTC-regulated exchanges fall under the agency’s exclusive jurisdiction when offering approved or self-certified products. This position has led to conflicts with state regulators who view certain sports-related contracts as unlicensed gambling. The jurisdictional fight may ultimately require a U.S. Supreme Court ruling.

Separately, the CFTC agreed Friday to extend the dormant designation of the Kraken Derivatives Exchange, whose last trade occurred in early 2025. Kraken requested the extension after acquiring Bitnomial earlier this year, giving it time to evaluate how to integrate the two platforms. The dormant status preserves the exchange’s regulatory standing without a requirement to resume trading immediately. Kraken has not provided a timetable for a possible restart.

The twin actions illustrate the CFTC’s dual approach: allowing an inactive registered platform to maintain optionality while demanding more thorough contract certifications from exchanges aggressively expanding into event-based derivatives.