CFTC Probes Crypto.com and Kalshi Over Super Bowl Derivatives

The Commodity Futures Trading Commission (CFTC) has initiated an investigation into Crypto.com and Kalshi, focusing on the legality of their derivatives products tied to the Super Bowl sports events. Both platforms allow users to place wagers on the outcomes of high-profile events, including the upcoming Super Bowl LIX.

Crypto.com, a Singapore-based cryptocurrency exchange, launched a derivatives platform on December 23, 2024, enabling users to bet on the outcome of the Super Bowl LIX, scheduled for February 9, 2025. The game will feature the Kansas City Chiefs against the Philadelphia Eagles. Crypto.com co-founder and CEO Kris Marszalek stated that the platform was regulated at the time of the Sports Events Trading product's launch.

Kalshi, known for enabling users to trade contracts based on event outcomes, gained attention during the last presidential election. The CFTC has previously expressed concerns that such betting could undermine the integrity of events. Although a federal court rejected the CFTC's motion against Kalshi's election betting, the agency has suggested that this decision should be overturned.

On the same day, Robinhood (NASDAQ:HOOD), a trading app with a crypto-friendly stance, announced its partnership with Kalshi to offer trading of Super Bowl derivatives contracts. Robinhood's platform had already permitted trading on the outcome of the 2024 presidential election.

As regulatory scrutiny increases, the outcome of the CFTC's investigation into these Super Bowl event contracts could have implications for the availability and regulation of similar derivative products in the future.