The Hyperliquid Policy Center (HPC) and Multicoin Capital submitted, on July 27, a joint comment to the U.S. Commodity Futures Trading Commission (CFTC). The document supports the agency's regulatory proposal for prediction markets, but requests changes to the model.
The entities believe that uniform federal regulation can prevent differences between states and facilitate the creation of products linked to events. The assessment comes as prediction markets gain ground on blockchain-based platforms.
The comment responds to the proposal "Prediction Markets; Public Interest Determinations," published by the CFTC in June. The text aims to modify Regulation 40.11 and create a 90-day period to analyze certain event contracts.
The proposal includes contracts related to gambling, war, terrorism, assassination, and other activities provided for in the Commodity Exchange Act. For HPC and Multicoin, the CFTC should have exclusive federal authority over these markets.
According to the document, allowing state rules could result in “fifty distinct state regimes.” In the assessment presented, this fragmentation would make it harder to operate national derivatives markets and would increase regulatory complexity for companies and developers.
One of the main points involves the interpretation of the term “involve” in the legislation. The group argues that the regulatory analysis should primarily consider the contract's settlement mechanism, rather than classifying a trade as betting solely because of its similarity to gambling.
Under this model, the special rule would be applied when the payment depended directly on an illegal activity. The letter also requests practical examples for contracts with multiple settlement possibilities or indirect references to activities considered sensitive.
The second recommendation concerns transparency after the analyses carried out by the CFTC. Currently, the agency provides for public explanations when it decides to block a given contract.
HPC and Multicoin argue that approval decisions should also provide sufficient information to guide the market. Without public justifications, other platforms could repeat legal analyses, seek additional guidance, or refrain from developing permitted products.
The suggestions may influence the regulation of prediction markets and on-chain event contracts in the United States, especially if the CFTC incorporates clearer criteria into the evaluation process.