Four prediction market platforms received regulatory relief from the Commodity Futures Trading Commission (CFTC) on Thursday, freeing them from swap data reporting obligations that typically apply to derivatives traders.
The CFTC's Division of Market Oversight and Division of Clearing and Risk issued no-action letters to Polymarket US, LedgerX (operating as MIAX Derivatives Exchange), PredictIt operator Aristotle Exchange, and Gemini's newly launched Gemini Titan platform.
The letters exempt these registered entities from requirements to report binary option transactions to swap data repositories, citing the limited applicability of traditional swap reporting rules to exchange -traded event contracts.
CFTC Requires Full Collateralization
The relief comes with strings attached. Each platform must ensure that all event contracts remain fully collateralized, meaning traders deposit enough funds upfront to cover their maximum possible loss on any position. This requirement puts prediction markets closer to exchange-traded futures than over-the-counter swaps, which typically involve bilateral credit arrangements.
Platforms must also publish time and sales data for all transactions promptly after execution, including trade timestamps, contract details, quantities, and prices. While this transparency measure falls short of real-time swap data repository reporting, it gives market participants and regulators visibility into trading activity.
.@CFTC Staff Issues No-Action Letters Regarding Event Contracts: https://t.co/oelx60JIap
— CFTC (@CFTC) December 11, 2025
The CFTC's letters don't change underlying law or address whether these contracts comply with other statutory requirements. The staff emphasized that the exemptions apply only to specific reporting regulations and don't excuse compliance with broader Commodity Exchange Act provisions.
Removing Intermediation Barriers
Two of the letters – those issued to Polymarket US and LedgerX – specifically remove earlier restrictions that prohibited futures commission merchants from intermediating trades. The December 11 modifications allow registered brokers to clear event contracts on behalf of customers, expanding market access beyond direct platform users.
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The CFTC granted these amendments after both platforms amended their operating rules to permit FCM participation. The change brings Polymarket US and LedgerX in line with no-action relief previously granted to other prediction market operators, which didn't include intermediation restrictions.
The latest reporting relief comes shortly after the CFTC unveiled a new CEO-level advisory body bringing together major prediction markets and digital asset firms, underscoring how event contracts and crypto infrastructure are now central to the agency’s modernization agenda. The group included, among others, the CEO of Polymarket and Gemini.
Industry Growth Drives Regulatory Attention
The regulatory accommodations arrive as prediction markets experience explosive growth. Kalshi and Polymarket combined for roughly $7.4 billion in trading volume during October 2025, with Kalshi alone processing $4.4 billion in transactions. Those figures surpass Polymarket's cumulative volume from its first four years of operation.
Gemini's entry into the sector through its Titan platform adds another regulated competitor to a market previously dominated by Kalshi and Polymarket. The exchange secured CFTC approval to operate as a designated contract market earlier this month, allowing U.S. customers to trade event contracts using existing dollar balances.
Prediction markets let users bet on real-world outcomes ranging from election results to economic data releases. The contracts function as binary options, paying out to holders of winning positions while leaving counterparties with nothing.
Why Kalshi and Robinhood Are Not in This Round
Kalshi currently operates under a different regulatory pathway and has previously received its own CFTC approvals around event contracts, while Robinhood’s core brokerage and trading offerings fall under a mix of securities and derivatives oversight that is separate from the swap-reporting issues addressed here.
The absence of their names in these letters does not imply any change in their status. It simply reflects that this batch of no-action relief was targeted at a specific group of registered entities that approached the CFTC staff with swap data reporting concerns for particular event-style swaps.
Despite their classification as swaps under the Commodity Exchange Act, the platforms argued these products share more characteristics with exchange-traded derivatives than over-the-counter instruments.
The CFTC noted its no-action positions mirror similar exemptions granted to other prediction market operators since 2017. Staff retain authority to modify, suspend or terminate the relief at their discretion.
