Tyler and Cameron Winklevoss, co-founders of Gemini, have urged the U.S. Commodity Futures Trading Commission (CFTC) to retract its proposed rule on event contracts. This proposal could ban prediction markets like Polymarket, which has sparked significant opposition from the cryptocurrency and prediction market communities.
Controversy Over the Proposed Rule:
The CFTC’s rule aims to ban all event contracts, including those on platforms like Polymarket. Critics, including the Winklevoss twins, argue that the rule is vague and overly broad, potentially limiting access and stifling innovation. Gemini, alongside companies such as Coinbase, has formally requested the CFTC withdraw the rule, stating it conflicts with the Commodity Exchange Act.
Political and Economic Impact:
The Winklevoss twins have criticized Senator Elizabeth Warren for supporting the ban on election betting via prediction markets. They argue that political pressures rather than thoughtful regulation are driving this move. They believe that if enacted, the rule is likely to face legal challenges, referencing the Supreme Court ruling in Loper Bright Enterprises v. Raimondo, which restricts regulatory agencies from exceeding their authority.
Legal and Regulatory Concerns:
Gemini and other critics argue that the rule exceeds the CFTC’s legal authority. Commissioner Summer Mersinger has noted that it goes beyond what Congress has authorized the Commission to enforce.
The Winklevoss twins are calling for the CFTC to reconsider its proposed rule, emphasizing the need for regulations that foster innovation and market access rather than restrict them. The future of event contracts and platforms like Polymarket remains uncertain as this debate continues.