Bitnomial has cleared a key regulatory step that allows it to launch prediction markets in the U.S.
Summary
- The CFTC issued a no-action letter covering Bitnomial’s event-based contracts.
- Relief applies to narrow reporting and recordkeeping rules for certain swaps.
- The approval clears the way for regulated U.S. prediction markets on Bitnomial.
Bitnomial has taken a regulatory step that opens the door to a rapidly growing type of U.S.-based crypto trading.
According to a Jan. 8 notice by the U.S. Commodity Futures Trading Commission, the approval comes through a narrowly scoped no-action letter issued by the agency’s market oversight and clearing divisions.
What the CFTC approval allows
The CFTC’s Division of Market Oversight and Division of Clearing and Risk said they will not pursue enforcement action against Bitnomial Exchange or Bitnomial Clearinghouse for limited deviations from swap reporting and record-keeping rules.
The relief applies only to certain binary and bounded contracts, often described as event or prediction contracts. These instruments settle on clear outcomes, such as whether a specific market event occurs within a defined range.
Under the letter, Bitnomial can offer these contracts without complying with some swap data reporting requirements that would otherwise apply. The exemption is narrow and conditional. It applies only to contracts traded on Bitnomial’s exchange and cleared through its registered clearinghouse.
The CFTC noted that the approach mirrors no-action positions granted to other regulated markets operating similar products.
Why it matters for prediction markets
The decision clears a practical path for Bitnomial to launch prediction markets inside the U.S. regulatory framework. Without this relief, the reporting burden tied to swap rules could make high-frequency event contracts difficult to run.
All contracts must be fully collateralized, and Bitnomial is still required to publish trading data and provide records to regulators when requested. The structure keeps oversight in place while allowing the products to function as designed.
Bitnomial already operates as a designated contract market and a registered derivatives clearing organization. The added approval expands its product range beyond futures and options into event-based trading, an area that has drawn growing interest from traders and institutions.
Prediction markets have attracted attention as tools for price discovery and risk management, but most of the activity has taken place on offshore or loosely regulated platforms. The approval provides traders and institutions with access to event-based contracts under federal supervision rather than relying on unregulated venues.
The strategy differs from previous times of regulatory uncertainty, when prediction markets had to deal with unresolved issues regarding oversight and legality.
