Regulatory Relaxation Signal? Interpreting the US CFTC's "No-Action Letter" to platforms like Polymarket

On December 11th, local time, the U.S. Commodity Futures Trading Commission (CFTC) issued a “No Action Letter” to four prediction market operators: Polymarket, PredictIt, Gemini, and LedgerX/MIAX.

The regulatory agency explicitly stated that as long as these companies meet certain requirements, enforcement actions will not be taken against some of their violations related to data reporting and record-keeping. On the day of the announcement, Bitcoin’s price remained above $92,500, and market sentiment was cautious.

01 Core of the Event: Practical Regulatory Adjustments

A “No Action Letter” is a common regulatory tool used by the CFTC. It is not an official legal approval but a conditional commitment.

Specifically, the CFTC commits that within the validity period of the letter (usually two years), it will not initiate enforcement actions against certain activities mentioned in the letter. This provides an anticipated, temporary safe space for innovative businesses operating in regulatory gray areas.

The key to this exemption is the relaxation of the strict reporting requirements for “swap data.” Traditionally, relevant trading data needed to be reported to designated repositories within milliseconds to minutes.

This creates an almost insurmountable technical barrier for blockchain prediction markets that experience settlement confirmation delays.

02 Rule Details: What Has Been Exempted and What Has Been Retained?

According to CFTC requirements, platforms granted exemptions are not entirely free; they must meet a series of alternative compliance conditions.

The primary condition is ensuring that all contracts are fully collateralized at all times, fundamentally preventing settlement risk. Contract settlement must be carried out through their designated platform, and all relevant data must be published on their own platform after execution.

The most significant relaxation relates to data reporting deadlines. The original requirements for real-time or near-real-time reporting have been eased to batch reports at the end of the trading day within 24 hours of execution.

This significantly reduces the technical complexity and compliance costs for these platforms, especially for small and medium-sized operators.

03 Impacted Platforms: Different Paths, Same Opportunities

Although all four platforms received exemptions simultaneously, their regulatory bases and market strategies differ. This table clearly shows their key differences:

Among them, Polymarket’s return is particularly notable. This well-known decentralized prediction market was penalized and blocked for U.S. users by the CFTC in 2022 due to compliance issues. Now, through a series of reorganizations, including acquiring a licensed exchange, it has paved the way for a re-entry into the U.S. market.

04 Industry Impact: The “Infrastructure Moment” for Prediction Markets

The CFTC’s action is seen by industry insiders as a key recognition of the emerging prediction market sector. It does not mean a complete deregulation but acknowledges the unique technological realities of the industry and provides a pragmatic compliance pathway.

This directly stimulates industry competition and expansion. Recently, another regulated prediction market platform, Kalshi, completed a massive funding round of $1 billion, with a valuation of $11 billion.

Robinhood’s report shows that its prediction market product, launched in cooperation with Kalshi, has become one of the fastest-growing revenue drivers.

Market data confirms its popularity: by November 2025, the total monthly trading volume of Polymarket and Kalshi approached $10 billion.

05 Market Resonance: Intertwining Predictions and Reality

The influence of prediction markets has far exceeded niche circles, becoming a frontier indicator of market sentiment. In the same week that the CFTC announced the news, market focus was centered on the Federal Reserve’s interest rate decision.

On the Polymarket platform, traders priced the probability of the Fed cutting rates in December at as high as 97%, almost treating it as a certainty.

Regarding Bitcoin prices, which are of more concern to crypto investors, prediction markets show cautious optimism. Based on late November data, the market estimates a roughly 48% chance that Bitcoin will reach $100,000 before December 31, 2025, while the probability of falling to $70,000 is only 11%.

As of December 12, Bitcoin’s price remained around $92,500, with a slight increase over the past 24 hours, as the market awaits clearer directional signals.

Future Outlook

Polymarket, which obtained the “No Action Letter,” is making final preparations to re-enter the U.S. market, with traders on its platform now considering a Fed rate cut as almost inevitable.

Another major player, Kalshi, with a valuation of $11 billion and $1 billion in new funding, is accelerating expansion on the fully regulated track.

Crypto prediction markets are no longer just about election and sports betting; they have become an important financial infrastructure for collective wisdom pricing on macroeconomic policies and asset prices.