Crypto.com launched a standalone prediction markets platform called OG on Tuesday ahead of the Super Bowl, offering federally regulated sports event contracts through its derivatives affiliate while the exchange and several competitors face legal challenges from state regulators alleging unlicensed sports betting operations.
What Happened: New Platform Launch
The platform will provide CFTC-regulated sports event contracts alongside financial, political, cultural, and entertainment markets through Crypto.com | Derivatives North America (CDNA), according to a company statement.
Kris Marszalek, co-founder and CEO of Crypto.com, said the company has seen 40x weekly growth in its prediction market business over the past six months. "This type of growth warrants a concerted effort with a standalone platform," he said.
Nick Lundgren, who will serve as OG's CEO while maintaining his role as Crypto.com's chief legal officer, pointed to the company's position as the first to offer federally licensed sports prediction contracts in the United States. The platform plans to introduce margin trading capabilities through CDNA's futures commission merchant license. OG is offering rewards to early users, with the first one million registrants eligible for up to $500.
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Why It Matters: State Enforcement Actions
The launch comes as Connecticut, Tennessee, Michigan, and Illinois have issued cease-and-desist orders to Kalshi, Polymarket, Crypto.com, and Robinhood, alleging the platforms operate unlicensed sports betting operations.
In Nevada, the Gaming Control Board filed a civil enforcement action against Coinbase Financial Markets to block its event contracts. A state court issued a temporary restraining order against Polymarket. Regulators had already begun similar action against Kalshi starting in Mar. 2024.
New York Attorney General Letitia James issued a consumer alert on Sunday, warning residents of risks posed by prediction markets. She described the platforms as offering bets masquerading as event contracts without consumer protections. Crypto.com is currently appealing a Nevada federal district court's denial of its preliminary injunction request seeking to block enforcement of state laws against its sports event contracts.
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