Regulators Back Down as Prediction Markets Surge
In a decisive shift for the prediction market industry, the Commodity Futures Trading Commission (CFTC) has officially withdrawn a Biden-era proposal that sought to ban event contracts on sports and political contests. According to Cointelegraph, CFTC Chair Mike Selig described the previous administration's attempt to prohibit these markets as a “frolic into merit regulation,” signaling a more open regulatory environment for 2026.
This federal reprieve coincides with a state-level victory for Coinbase. A Nevada judge has declined to grant regulators' emergency bid to halt Coinbase’s event contract markets, allowing the exchange to continue operations while it presses a preemption argument in federal court, reports Cointelegraph. Traders analyzing market sentiment on predictionmarketstools.com have closely watched these legal battles as indicators of the industry's long-term viability.
Kalshi Eyes Record Super Bowl Volume
With regulatory headwinds easing, regulated exchange Kalshi is preparing for a massive influx of volume for the upcoming Super Bowl. The platform has already recorded nearly $170 million in Super Bowl-related bets. To manage this scale and address regulatory scrutiny, Kalshi has formed an independent surveillance committee to oversee market integrity, as detailed by Cointelegraph.
Polymarket Hints at Token, Upgrades Infrastructure
While U.S. regulated entities fortify their positions, offshore giant Polymarket is signaling a major evolution. The platform has filed trademark applications for "POLY" and "$POLY" tied to a digital token, fueling speculation of an imminent airdrop or token launch, according to Decrypt.
Simultaneously, Polymarket is improving its payment infrastructure. The platform is partnering with Circle to migrate from bridged USDC on Polygon to native USDC settlement, a move designed to reduce cross-chain risks and improve transaction reliability (Cointelegraph).
Coinbase Financial Outlook
Despite its legal win in Nevada, Coinbase faces financial pressure elsewhere. CoinDesk reports that Citi has cut its price target for the exchange to $400 following a 65% stock plunge, citing a "brutal risk-off environment" and delays in broader market structure legislation.