CFTC Probes Super Bowl Contracts on Crypto.com and Kalshi

The Commodity Futures Trading Commission (CFTC) has launched an inquiry into Super Bowl-themed event contracts offered on Crypto.com and Kalshi. The investigation aims to assess the compliance of these contracts with derivatives regulations, particularly their susceptibility to manipulation and adherence to other regulatory requirements.

The CFTC, empowered to seek additional information from companies that self-certify their financial products, is scrutinizing these contracts following a January vote to place them under specific regulatory review. The review seeks to determine if the contracts constitute gaming, which would trigger heightened oversight to ensure they are in the public interest. By mid-April, the CFTC is expected to vote on whether to bar these contracts.

The CFTC's scrutiny comes shortly after Robinhood announced its plans to launch its own sports trading platform. The agency has also recently announced plans to hold public roundtables to discuss emerging issues in derivatives markets, indicating a broader focus on the sector's regulatory landscape.

In other news, two of the largest cryptocurrency exchanges in the United States, Coinbase and Kraken, have secured key regulatory approvals to expand their services across the European Union and the United Kingdom. Kraken received a license under the European Union's Markets in Financial Instruments Directive (MiFID) by acquiring a Cypriot investment firm already authorized by the Cyprus Securities and Exchange Commission. This license allows Kraken to offer cryptocurrency derivatives to professional traders in select EU markets.

Coinbase, meanwhile, received a Virtual Asset Service Provider (VASP) registration from Britain's Financial Conduct Authority, enabling the company to provide both cryptocurrency and traditional financial services to U.K. customers. The timing of these approvals is significant, as the EU's Markets in Crypto-Assets (MiCA) regulations are set to take full effect later this year, while the U.K. is set to introduce a comprehensive crypto regulatory framework early in the year.

In the world of blockchain networks, Layer-1 network Hyperliquid has surpassed Ethereum in seven-day revenue, generating approximately $12.8 million over the period compared to Ethereum's around $11.5 million. The growth of Hyperliquid's revenue reflects the network's rapid growth as a venue for trading perpetual futures contracts, as well as Ethereum's difficulty in competing against upstart blockchains. While Ethereum still commands significantly higher daily trading volume, Hyperliquid's daily transaction volume has nearly doubled since the start