The Commodity Futures Trading Commission (CFTC) has issued “no-action” letters to a selection of prediction markets, granting them an exemption from the obligations associated with swap data reporting and record-keeping regulations.

The Division of Market Oversight and the Division of Clearing and Risk at the CFTC will not initiate enforcement actions against certain prediction market platforms like Polymarket US, provided they adhere to specific requirements, as mentioned in a statement released on Thursday.

“The no-action letters apply only in narrow circumstances and resemble those previously issued for similar designated contract markets and derivatives clearing organizations,” the CFTC stated.

Among those receiving the no-action letters are Polymarket US, LedgerX, PredictIt, and Gemini Titan, the prediction markets wing of the crypto exchange Gemini.

Source: CFTC

As per the letters, to avoid enforcement, these platforms must ensure full collateralization of their contracts, meaning all contracts should be fully backed by assets in reserve, and they must publish time and sales data pertaining to event contract transactions on their websites after each execution.

Prediction markets allow traders to make bets on various events, from sports outcomes to unconventional occurrences, such as the attire choices of political figures.

These contracts usually bring about extensive reporting and record-keeping requirements as prediction markets are considered designated contract markets. However, the new no-action letter provides relief from immediate enforcement risks associated with these obligations.

Prediction Markets Experience Notable Growth in 2025

This year, prediction markets have surged in popularity, recording billions of transactions across platforms like Kalshi and Polymarket. Recently, Kalshi reported a trading volume of $5.14 billion over the past month, while Polymarket noted a trading volume of $1.9 billion during the same timeframe.

Other companies are also starting to explore this arena. Crypto.com has introduced a prediction market platform, expected to integrate with Trump Media, and tech analyst Jane Manchun Wong noted evidence suggesting Coinbase is developing its own prediction market platform.

Related: Gemini sees 14% rise following new license for US prediction markets.

A no-action letter signifies that CFTC staff will not pursue enforcement for regulatory non-compliance under specific circumstances; however, it does not alter the law and is typically utilized to minimize regulatory risks as the market or product develops.