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Binance.US plans to apply for a Commodity Futures Trading Commission license in August as it prepares to launch a prediction market platform for U.S. customers. CEO Stephen Gregory disclosed the plan during the Rare Evo blockchain conference on July 29.
The crypto exchange plans to apply to become a designated contract market, or DCM, which is a federally regulated derivatives exchange. Approval would allow Binance.US to offer contracts based on the results of future events. The company has not announced a launch date or said which markets it plans to offer.
Binance.US Targets CFTC Approval in August
Binance.US expects to submit its DCM application to the CFTC during August. The regulator requires applicants to show that their technology, market controls, surveillance systems and operating rules meet the Commodity Exchange Act’s requirements.
The CFTC has up to 180 days to review a complete DCM application. Binance.US should therefore not expect immediate approval after submitting its documents. Approval would also depend on Binance.US demonstrating systems for contract listings, market surveillance and customer protection.
Gregory previously described prediction markets as “super hot” and said they had become a major area of industry interest.
Prediction Markets Form Part of Wider Expansion
The prediction market is part of Binance.US’s plan to offer more than spot crypto trading. The company is also considering derivatives and perpetual futures as it expands its U.S. business under Gregory, who became CEO in March.
Binance.US has also lowered some trading fees as it tries to attract more American customers. Its wider strategy is to offer more products on a platform that has mainly focused on buying, selling and holding digital assets.
CFTC Tightens Oversight of Event Contracts
The application would arrive as prediction markets face closer regulatory attention. In March, the CFTC issued an advisory reminding registered exchanges of their oversight obligations for event contracts. The guidance focused on market manipulation, product design, surveillance, and the process for listing new contracts.
The regulator is also considering broader rules for sports and other event-based contracts. State authorities and sports organizations have raised concerns about gambling laws and the possible use of insider information. They have also questioned contracts based on events that could be easily manipulated.
Receiving a DCM license would not automatically approve every prediction market Binance.US wants to offer. Each contract would still need to be submitted to the CFTC or certified under the regulator’s product-listing rules before trading could begin.
