The Hyperliquid Policy Center teamed up with Multicoin Capital to back the Commodity Futures Trading Commission’s (CFTC) new proposal for regulating prediction market contracts. They submitted a joint comment supporting the idea of clear federal standards to bring more certainty to this emerging sector.
Clear guidelines for complex event contracts
The CFTC’s proposed framework aims to clarify how contracts tied to sensitive topics like gaming, war, terrorism, or assassination should be reviewed. The rule lays out a three-step test to determine if a product qualifies as an event contract, if it involves restricted activities, and whether its trading would harm the public interest.
Instead of outright bans, the commission plans to evaluate each contract case by case within a 90-day review period. Chairman Michael Selig described the approach as a "durable, transparent framework" designed to reduce regulatory uncertainty and policy swings that can happen between different administrations.
Hyperliquid and Multicoin stressed that written federal rules are superior to vague staff interpretations, helping market operators design contracts with confidence. Their filing, submitted on July 27 the comment deadline also advocates keeping the CFTC as the single federal regulator for exchange-traded prediction contracts, distinguishing these from traditional bookmaker wagers.
Prediction markets have surged in recent months, topping $50 billion in trading volume last month alone. This growth has attracted major players from traditional finance, signaling a maturing market that needs clearer oversight to thrive.
