On Tuesday, ahead of the Super Bowl, Crypto.com launched the independent prediction markets platform $OG , which offers federally regulated sports event contracts through its derivatives subsidiary. This comes as exchanges and several competitors face legal challenges from state regulators over unlicensed sports betting operations.
What happened: Launch of the new platform
According to the company's announcement, this platform will provide not only CFTC-regulated sports event contracts through Crypto.com | Derivatives North America (CDNA) but also financial, political, cultural, and entertainment markets.
Kris Marszalek, co-founder and CEO of Crypto.com, stated that the prediction market business has seen a 40-fold growth on a weekly basis over the past six months. He noted, "This level of growth justifies an intensive effort through a standalone platform."
Nick Lundgren, who serves as CEO of OG while maintaining the role of Chief Legal Officer (CLO) at Crypto.com, emphasized that his company is the first in the United States to offer federally licensed sports prediction contracts. This platform plans to introduce margin trading features through the FCM license of CDNA. OG is providing rewards to early users, with the first 1 million subscribers eligible to receive up to $500.
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Why it matters: State enforcement actions
This launch comes as Connecticut, Tennessee, Michigan, and Illinois issued cease and desist orders against Kalshi, Polymarket, Crypto.com, and Robinhood for operating without authorization in sports betting.
In Nevada, the Gaming Control Board has initiated civil enforcement actions to block event contracts from Coinbase Financial Markets. The state court issued a temporary restraining order (TRO) against Polymarket. Regulators have already begun similar actions against Kalshi, starting in March 2024.
New York Attorney General Letitia James issued a consumer alert on Sunday, warning residents of the risks posed by prediction markets. She explained that these platforms disguise simple betting as event contracts without consumer protection measures. Crypto.com is currently appealing a ruling that dismissed a request for a preliminary injunction aimed at blocking state enforcement against sports event contracts by the Nevada federal district court.