Sporttrade applies with the CFTC to become a registered exchange
Philadelphia-based financial technology company Sporttrade have recently announced that they will apply for federal exchange and clearing registration, according to a press release on Wednesday.
The company have announced submission of Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO) applications with the Commodities Futures Trading Commission (CFTC).
“Today marks the opening of an incredibly exciting chapter of the Sporttrade journey, one that facilitates a return to our original vision.” Said Alex Kane, the founder and CEO of Sporttrade.
“The CFTC’s market-based regulatory framework enables Sporttrade to provide market participants an elevated level of efficiency, transparency, and consumer protection relative to what we’ve been able to offer to date.”
Sporttrade now become the first company to apply for DCM registration alongside operating a state-regulated betting platform.
New Jersey, Colorado, Iowa, Arizona, and Virginia are the five states in which Sporttrade is the licensed betting operator.
“We had originally constructed our venue under the assumption that the sports trading vertical would follow the trajectory of most other electronic markets, one towards efficiency and transparency powered by broker intermediation and institutional participation,” Added Kane
“Federal registration will thus allow us to finally unlock the full potential of our natively-built exchange, clearing, and broker technology in our pursuit to always put the customer first.”
What platforms could register with CFTC next?
While Sporttrade is the first company to apply for CFTC registration while operating a state-regulated betting platform, there could be several ready to follow in its footsteps.
Novig, an exchange-affiliated sports-focused platform, has entered the federal registry pipeline in a bid to become a registered exchange.
Other platforms, such as ProphetX, are also pursuing CFTC registration in the near future as they bid to join Sporttrade. Legal expert Daniel Wallach called Sporttrade’s application to the CFTC a “death knell” for other regulated prediction markets, a characterization the company disputed, writing on X: “In our view, it would be impossible to comply with both CFTC and state regulations concurrently within the same state.”
The landscape is constantly evolving, which could see more and more platforms announcing their intent to become a registered exchange over the coming months.
Featured Image: Sporttrade
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