The US Commodity Futures Trading Commission (CFTC) has issued no-action letters granting four prediction market operators limited relief from swap data reporting and record-keeping rules.
CFTC Gives Prediction Markets Relief as Wall Street Piles In
12 December 2025 - 10:00 CET
By Matt Neill
The exemptions, announced late Thursday, apply to Polymarket US, LedgerX, PredictIt and Gemini Titan. While narrow, the relief signals a decisive regulatory shift toward accommodating event contracts as a mainstream derivatives product rather than a fringe crypto experiment. Critically, the letters for Polymarket US and LedgerX also remove restrictions on Futures Commission Merchants (FCMs), effectively allowing registered brokers to clear trades on behalf of customers for the first time.
Operational barriers lowered
The relief removes significant friction for these platforms. By exempting them from onerous swap data reporting typically designed for complex institutional derivatives, the CFTC has lowered the cost of compliance.
The letters come with strict conditions. All contracts must remain fully collateralized, and firms are required to publish time and sales data for every trade after execution. This ensures transparency remains high while removing the bureaucratic drag that has historically kept traditional financial players on the sidelines.
Institutions get the green light
The relief lands as the prediction market industry expands at a rapid pace, with combined trading volumes for major platforms hitting $7.4bn in October 2025 alone.
The timing suggests the regulator is positioning itself to shape a fast-maturing market rather than restrain it. By allowing FCMs to intermediate trades, the CFTC has effectively opened the door for Wall Street brokers to offer event contracts to their clients directly. This moves the sector from a retail-dominated speculation venue to a potential new asset class for institutional portfolios.
