New CFTC Chair Takes Favorable Approach to Prediction Markets

It appears Crypto.com is about to get a big break.

The Commodity Futures Trading Commission (CFTC) has a new chair: Caroline Pham. The former Citigroup Managing Director has a strong background and a favorable position on prediction markets. Her tenure comes just as sites like Crypto.com have begun to face pushback from the CFTC, signaling that the fight may be shortlived.

While Pham has yet to make any official moves as the head of the CFTC, that could change as soon as next week.

Pham Defines CFTC Role

Caroline Pham has been vocal about what she believes the role of the CFTC should be with prediction markets.

“The CFTC has a role in regulating event contracts as a market regulator, but it is essential that the CFTC does not encroach upon the prerogatives of states,” said Pham. “An appropriate event contracts proposal would have struck a balance between federal oversight and state autonomy by focusing on the CFTC’s core mandate of promoting market stability and protecting market participants from fraud and abusive practices.”

Crypto.com Refuses CFTC Request

Pham’s new position comes just days after the CFTC sent a letter requesting Crypto.com suspend its sports prediction markets. The company loudly refused the request, buoyed by the confidence that President Trump would side with it. Their hopes seem to have been confirmed, as Pham has been appointed to lead the commission.

Several lawmakers have been warning about prediction markets. These markets allow users to bet against the public instead of the house, which is outside the legal definition of gambling.

Political Betting Also at Stake

While sports prediction markets are currently at the center of the fight between the CFTC and trading platforms, political ones are also becoming popular. US Congress is attempting to ban political betting, an effort that also includes prediction markets. 

The CFTC opposes political markets, but Pham has different ideas. While she may not have the power to make the final decision on their legality, she seems to represent the views of President Trump and the ruling Republican party.