a16z publicly supports the CFTC's position, opposing state-level restrictions on prediction markets

Deep Tide TechFlow News, May 2nd, according to The Block, venture capital firm a16z submitted an 18-page comment letter to the U.S. Commodity Futures Trading Commission (CFTC) on Friday, supporting the CFTC’s position and opposing state restrictions on prediction markets. a16z stated that bans and proposed prohibitions issued by state regulators against prediction market platforms are causing “serious barriers to fair access” for users and could severely limit available liquidity.

Over the past month, the CFTC has filed multiple lawsuits against Illinois, Arizona, Connecticut, New York, and Wisconsin, claiming that these states are overstepping their regulatory authority over markets within federal jurisdiction. CFTC Chairman Mike Selig previously stated that event contracts in prediction markets are classified as swap products and fall under CFTC “exclusive jurisdiction.”

a16z also pointed out that the pricing mechanism of prediction markets is a “unique form of price discovery,” and on-chain prediction markets are more transparent than traditional platforms due to transaction auditability. In April this year, Polymarket and Kalshi’s cumulative historical trading volume exceeded $150 billion.