Robinhood Derivatives temporarily suspended the rollout of its new sports contracts market following a CFTC request about user access to such products.
Robinhood's Challenges with CFTC
According to the company’s official statements, Robinhood was notified to suspend customer access to sports event contracts. Consequently, about 1% of users, who had access to the new product, faced limitations. Robinhood expressed disappointment with the CFTC's decision, highlighting that the company had been actively considering the commission's feedback and providing its proposals on regulatory balancing.
CFTC's Stand on Sports Contracts
The CFTC began a thorough review of sports event contracts launched in collaboration with Kalshi. The product allowed trading on the outcome of the game between Philadelphia Eagles and Kansas City Chiefs. This decision came amidst increased scrutiny from the commission towards such contracts, currently assessing their compliance with derivative standards and protection against market manipulation.
Market Impact
The CFTC's decision comes amid tightened regulation on event contracts. The commission previously announced plans for public roundtables to discuss these issues. Crypto.com continues to maintain its confidence in the legality of its operations, stating that it views the CFTC as the appropriate authority to ensure market integrity.
In conclusion, as a result of the CFTC's intervention, Robinhood is required to adapt its plans for the sports contract markets, while continuing to collaborate with the commission to develop a more comprehensive platform in the future.
