US regulators to investigate Crypto.com football futures trading

Crypto.com is in hot water with federal regulators over its new football futures trading contracts. These contracts let users bet on the outcomes of major games, including the Super Bowl, and they’ve triggered a full-blown inquiry by the Commodity Futures Trading Commission (CFTC).

The five-member agency is reportedly voting on whether to launch a 90-day review, a move that could lead to a ban if the contracts are found to break gaming laws.

The contracts, launched on Crypto.com’s Chicago-based derivatives exchange just days before Christmas, let users over 18 place bets on football outcomes without directly naming NFL teams or games.

A regulatory review is now underway, but the CFTC doesn’t have the authority to immediately pull the plug on trading. This means the contracts will likely remain available even after the Super Bowl on February 9, unless the commission’s decision leads to a ban.

CFTC weighs legality of football bets

Crypto.com submitted its filings for the football contracts on December 19. Legally, the CFTC gets one business day to review such filings before trading can start, but with the holidays and a looming government shutdown, regulators didn’t have time to act.

Now with scrutiny mounting, questions are being raised about whether the contracts align with U.S. gaming laws.

“This isn’t a decision the current leadership of the CFTC should be making,” a Crypto.com spokesperson said, expressing frustration that the issue is being addressed so close to a leadership transition at the agency.

Crypto.com isn’t the only firm facing such challenges. Back in 2021, ErisX introduced similar contracts, but they withdrew their proposal before the CFTC could vote to ban them. Crypto.com’s contracts, however, are live—and causing quite a stir.

On its app, Crypto.com allows users to bet on the Super Bowl or AFC championship, listing options like “hometown celebration” to describe contracts tied to team victories.

These contracts are priced at $100 each, with individual traders capped at 2,500 contracts or $250,000 in notional value. Market makers though, can hold up to 250,000 contracts.

Nationwide reach shakes up the market

Crypto.com’s move into sports betting is a direct challenge to traditional platforms like DraftKings and FanDuel, which operate state by state. Crypto.com sidesteps that limitation by offering trading across all 50 states.

While sportsbooks set odds and take on the financial risk of payouts, Crypto.com simply facilitates trades between two parties and collects a small fee. The platform’s contracts add to a crowded but fragmented market.

Mobile sports betting is legal in 30 states and Washington, D.C., with unregulated platforms like Polymarket also allowing bets on events like the Super Bowl. But Crypto.com’s nationwide reach has raised eyebrows among both competitors and regulators.

The CFTC has long been wary of contracts tied to sports, war, assassination, and other prohibited activities. However, a recent legal decision in late 2024 opened the door for regulated exchanges to offer political prediction markets, indirectly granting a pathway for contracts like Crypto.com’s football futures.

Nick Lundgren, Crypto.com’s Chief Legal Officer, defended the contracts, saying, “Having CFTC oversight ensures market integrity, manipulation controls, and availability in all 50 states.”

Regulatory uncertainty ahead

The CFTC’s stance on event contracts remains very uncertain. In 2024, the agency drafted—but never finalized—a rule defining “gaming” in such markets. This proposed rule would have banned trading on politics, sports, and other events deemed “against public interest.”

Rostin Behnam, the outgoing CFTC chairman, recently commented on the issue, saying, “The line between what’s legal and illegal, what’s permitted and impermissible, is getting blurrier. This moves us far from the original purpose of derivatives markets.”

Behnam is stepping down on January 20 and leaving the commission entirely on February 7. His departure comes just as President Trump’s administration, which is expected to take a more crypto-friendly approach, prepares to appoint new leadership.

The president is yet to name Behnam’s successor though, but everyone’s expecting a pro-crypto figure. That’s just how Trump rolls now.

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