Blockchain.com seeks CFTC licenses for prediction markets and derivatives

What happened

Blockchain.com has reportedly applied to the US Commodity Futures Trading Commission for approval of prediction market offerings and crypto derivatives. CNBC reported that the exchange filed for two licenses with the CFTC covering event contracts and crypto derivatives for US-based retail and institutional investors.

The two filings are for a designated contract market license and a futures commission merchant registration. A DCM would allow Blockchain.com to operate as a futures exchange for event contracts, and the FCM registration would allow it to act as a broker for derivatives contracts.

CEO and co-founder Peter Smith said the company wants customers to manage digital assets, trade derivatives and access event-based markets through a single platform. According to the CNBC report, he said the applications represent a step toward delivering these services within established US regulatory frameworks.

Why it matters

Approval is not assured.

Prediction market oversight is being tested in US courts, and many state-level authorities have lawsuits pending against companies over alleged violations of laws on betting on sports and elections. Last month, New Jersey officials filed a petition with the US Supreme Court to weigh in on their case against Kalshi.

CFTC Chair Michael Selig has claimed the agency has exclusive jurisdiction over prediction markets. He has justified moving forward with crypto regulation through rulemaking rather than legislation passed by Congress, invoking the downfall of the FTX exchange.

What the data shows

Cointelegraph reported that Blockchain.com was also considering an initial public offering with a valuation of up to $6 billion, expecting to raise $500 million.

CoinGape reported that the company confidentially filed for an initial public offering with the US Securities and Exchange Commission in May, citing Bloomberg.

Selig remains the CFTC's only commissioner and chair. The report said the White House had announced no nominations for the four empty seats at the agency.

Background

Blockchain.com announced in July that it planned to partner with Polymarket as part of a prediction markets integration on the company's app. If approved, the CFTC license would allow the exchange to offer its own marketplace with event contracts.

CoinGape reported that Blockchain.com previously expanded prediction markets and perpetual futures through Polymarket and Hyperliquid partnerships. In August, the company gained admission to Nigeria's Securities and Exchange Commission regulatory incubation programme.

Last month, Blockchain.com partnered with the New York Stock Exchange to explore wider international access to tokenized US stocks and exchange-traded funds.

What is still unclear

• The reports do not say when the CFTC will decide on the two applications or what conditions it might attach.
• The reports do not state the terms of the planned Polymarket partnership or how it would sit alongside a Blockchain.com event-contract marketplace.
• The reports do not give a date for the reported initial public offering.

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