Commissioner Summer Mersinger of the Commodities Futures Trading Commission has a bone to pick — with the CFTC.
The Biden-nominated official took the stage Thursday at the Consensus crypto conference in Austin, Texas, and lambasted her own agency’s stance on prediction markets.
“I think we are taking a very dangerous approach to regulating these,” explained Mersinger. “I worry that this could end in a lot of litigation.”
Earlier this month, the CFTC proposed new rules that would ban so-called “events contracts” dealing with certain real-world events, like US election outcomes and sports games. Those events contracts are the bread and butter of many prediction markets, like the crypto-based Polymarket, which allows traders to place bets on a wide range of topics.
“To me, then you’re just driving all of this offshore, which is more concerning when you’re talking about US investors who do want to participate in these markets,” said Mersinger. “I was frustrated with our rulemaking.”
Would-be bettors in the US may be frustrated as well. According to Polymarket, which doesn’t allow US persons to place bets on its site, more than $141M has been wagered on the upcoming US presidential election alone. PredictIt, which is based in New Zealand, likewise has a thriving events contract on the outcome of this fall’s US presidential election.
“Congress gave us the authority to regulate these markets, so at the end of the day these are legal markets,” emphasized Mersinger. “And I think I have to repeat that a lot in the agency.”
