In brief
- Crypto.com has launched OG, a standalone prediction markets platform offering CFTC-regulated sports event contracts and margin trading capabilities.
- Nick Lundgren, Crypto.com’s Chief Legal Officer, will serve as CEO of OG while the company reports 40x weekly growth in prediction markets over six months.
- Multiple states have begun enforcement actions against Kalshi, Polymarket, Crypto.com, and Robinhood over unlicensed sports wagering allegations.
Crypto.com unveiled a standalone prediction markets platform on Tuesday ahead of the Super Bowl, while the exchange and other prediction platforms confront legal actions from state regulators targeting competing event-contract offerings.
The platform, called OG, will offer CFTC-regulated sports event contracts alongside financial, political, cultural, and entertainment markets through Crypto.com’s derivatives affiliate, Crypto.com | Derivatives North America (CDNA), according to a statement released Tuesday.
“We’ve experienced 40x weekly growth in our prediction market business over the last six months,” Kris Marszalek, Co-Founder and CEO of Crypto.com, said in the statement. “This type of growth warrants a concerted effort with a standalone platform.”
OG is offering rewards to early users, with the first one million people who sign up eligible for up to $500 in rewards.
First-mover advantage
Nick Lundgren, named CEO of OG while maintaining his role as Crypto.com’s Chief Legal Officer, pointed out the company’s first-mover advantage in federally regulated sports prediction contracts.
“Crypto.com was the first company to offer federally licensed sports prediction contracts in the United States, so launching OG is very fitting,” Lundgren said in the statement. “We have tremendous momentum and expertise to establish OG as a market leader for consumers in this deca-billion dollar industry.”
The platform plans to introduce margin trading capabilities through CDNA’s futures commission merchant license, which would make it the first prediction markets platform to offer such features.
OG will also launch a VIP program leveraging Crypto.com’s partnerships with Crypto.com Arena, UFC, Formula 1, and UEFA Champions League.
State enforcement
The platform is eyeing the sector’s growth potential despite rising enforcement actions from state gaming regulators who claim exclusive authority over sports wagering operations.
Connecticut, Tennessee, Michigan, and Illinois have all issued cease-and-desist orders to Kalshi, Polymarket, Crypto.com, and Robinhood, alleging they operate unlicensed sports betting operations.
In Nevada, the Gaming Control Board filed a civil enforcement action against Coinbase Financial Markets seeking to block its event contracts, a state court issued a temporary restraining order against Polymarket, and regulators had already begun similar action against Kalshi starting in March last year.
The platforms have largely refused to comply, insisting that federal regulators hold exclusive jurisdiction.
New York Attorney General Letitia James issued a consumer alert on Sunday, warning residents of risks posed by prediction markets, describing the platforms as offering bets masquerading as event contracts without consumer protections or supervision from the New York Gaming Commission.
Currently, Crypto.com is appealing a Nevada federal district court’s denial of its preliminary injunction request, which sought to block the region from enforcing state laws against its sports event contracts.
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Source: https://decrypt.co/356895/crypto-com-unveils-us-prediction-markets-platform-as-legal-pressure-mounts-on-rivals
