What Is the CFTC's New Prediction Market License and Why It's a Game-Changer in December 2025

The U.S. Commodity Futures Trading Commission (CFTC) granted a major U.S. cryptocurrency platform its long-awaited Designated Contract Market (DCM) license, ending a five-year application process that began in March 2020.

This approval officially opens the door for fully regulated, on-shore prediction markets in the United States, allowing American users to legally trade yes/no event contracts on politics, economics, sports, culture, crypto prices, and macro outcomes, all under direct CFTC oversight.

Why This Is a Watershed Moment

• First major crypto-native venue to receive full DCM status for event contracts
• Ends the era of offshore-only prediction markets for U.S. residents
• Directly competes with Kalshi and Polymarket’s U.S. entity, but with the advantage of existing crypto user base and fiat rails
• Brings institutional-grade compliance, custody, and transparency to a category previously stuck in regulatory gray zones

What U.S. Users Can Now Trade (Legally)

• Binary yes/no contracts settled in USD or stablecoins
• Markets on everything from “Will Bitcoin hit $100K by Dec 31?” to election outcomes, Fed decisions, and sports results
• Full KYC, AML, and CFTC supervision
• No more VPNs or offshore workarounds for American traders

Market Reaction

• Prediction market category volume spiked 18% overnight on the news
• Kalshi’s daily volume dipped ~5% as traders anticipate competition
• Total on-chain + regulated prediction market TVL expected to surpass $5 billion in 2026 (from $1.8B today)
• Industry analysts calling this “the moment prediction markets go mainstream in America”

Bigger Picture

After Kalshi’s multi-year court battle proved the model works and Polymarket demonstrated explosive demand during the 2024 election cycle ($3.4B in volume), regulators are now comfortable green-lighting scaled, compliant versions.

This approval confirms the CFTC’s stance that prediction markets serve legitimate economic and informational purposes, not gambling, as previously feared, gambling.

Bottom Line

The U.S. just got its first fully regulated, crypto-integrated prediction market platform. 2026 will be the year event contracts move from niche offshore apps to mainstream finance, right alongside Bitcoin ETFs and stablecoin payments.

The regulatory dam has officially broken. Prediction markets are now unequivocally legal, compliant, and ready for prime time in America.