Wu Says learned that the European Securities and Markets Authority (ESMA) issued a statement clarifying that many event contracts in prediction markets, if they meet the definition of financial instruments, are already subject to the EU’s ban on binary options for retail investors, which has been in effect since 2018. ESMA stated that whether a contract qualifies as a financial instrument depends on its characteristics, not its marketing method, and event contracts with binary outcomes and fixed returns are likely to fall within the regulatory scope. ESMA emphasized that this statement does not introduce new restrictions but reaffirms existing regulatory requirements amid the rapid development of prediction markets; even if such products are offered only to professional or institutional clients, they must still comply with the authorization requirements under MiFID II.