Winklevoss Twins and Coinbase Unite Against CFTC Rule Threatening Polymarket

• The Winklevoss twins, founders of Gemini, have publicly urged the US Commodities Futures Trading Commission (CFTC) to retract its proposed rule on event contracts.
• The rule is being opposed by several crypto firms such as Coinbase, which believe it negatively impacts prediction markets like Polymarket.
• Cameron Winklevoss criticized the proposal, stating it is inconsistent with the legal principles established by the Commodity Exchange Act.

Discover how the Winklevoss twins and leading crypto firms are challenging the CFTC’s proposed regulations, which they argue could stifle innovation in prediction markets.

Winklevoss Twins and Coinbase Challenge CFTC’s Event Contracts Rule

In a significant development, Tyler and Cameron Winklevoss, co-founders of Gemini, have urged the US Commodities Futures Trading Commission (CFTC) to withdraw its proposed rule concerning event contracts. This call to action follows similar sentiments from other major crypto companies like Coinbase, highlighting a growing concern within the crypto community regarding unnecessarily restrictive regulations.

Impact on Prediction Markets

The proposed rule by the CFTC seeks to ban event contracts in the United States, a move that has sparked considerable pushback. Crypto exchanges argue that the rule is overly broad, effectively categorizing all event contracts under the realm of “gaming.” This has major implications for platforms like Polymarket, which facilitate prediction markets that many view as valuable financial instruments. According to Gemini, the proposed regulation contradicts the statutory framework established by the Commodity Exchange Act, thus making it legally dubious.

Regulatory and Political Dimensions

Adding to the controversy, the Winklevoss twins have vocally criticized political figures like Senator Elizabeth Warren, who has been a proponent of strict regulatory measures against event contracts, including election betting on platforms like Polymarket. The twins argue that such political pressures should not influence regulatory bodies, emphasizing that regulations need to be thoughtful and not driven by political agendas. They believe that banning these markets could hinder innovation and economic growth.

Legal Grounds for Contesting the Rule

The Winklevoss twins have also highlighted a recent Supreme Court ruling in Loper Bright Enterprises v. Raimondo as a potential legal recourse for contesting the proposed rule. This ruling underscores that regulatory agencies should not overextend their authority through new rulemaking, suggesting that the CFTC’s proposed rule could be struck down if challenged in court. Moreover, Gemini’s letter to the CFTC reiterates that any regulatory actions should be aligned with Congressional authority and legal precedents.

Conclusion

In summary, the Winklevoss twins, along with other key players in the crypto industry, are advocating for the withdrawal of the CFTC’s proposed rule on event contracts. They argue that such a rule would have significant economic consequences, stifling innovation and denying Americans access to valuable financial markets. The ongoing debate highlights the need for balanced and legally sound regulatory approaches that foster innovation while protecting market integrity. As the situation evolves, the crypto community will be closely watching to see how these regulatory challenges unfold.

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