Cryptocurrency exchange Crypto.com is creating an internal market-making team to support its prediction markets. This development, claimed to be in full compliance with regulations, aims to enhance liquidity despite ongoing scrutiny of market-making practices.

A report from Bloomberg has revealed that Crypto.com is looking to hire a “quant trader” to facilitate the buying and selling of contracts relating to the outcomes of sporting events on its prediction platform.

Crypto.com Market Making Source: Bloomberg

This approach by exchanges raises concerns regarding potential conflicts of interest, especially as prediction markets become increasingly popular in both cryptocurrency and traditional markets. In an official statement, a representative from Crypto.com asserted that their trading operations comply with disclosure requirements set forth by the US Commodity Futures Trading Commission. They emphasized that the internal market-making team operates in tandem with external entities under the same regulatory framework to maintain market fairness.

“The bottom line for customers is more competition and liquidity on the platform creates a better overall experience,” the spokesperson noted, indicating that no internal market maker receives preferential access to data over others.

Crypto.com claims that it does not profit from proprietary trading but instead provides customers access to digital assets for a fee.

Market-Making Beyond Crypto.com

Crypto.com is not alone in its approach to market making. Other platforms like Kalshi and Polymarket have also employed market makers to foster liquidity. Kalshi, known for its federally regulated event-contract exchange, uses designated market makers, while Polymarket has instigated plans to establish a similar internal unit to bolster its trading activities.

For further news on related subjects, check out our article on DraftKings’ interest in cryptocurrency.