HPC and Multicoin Back CFTC Proposal to Set National Rules for Prediction Markets

HPC and Multicoin Capital have endorsed the Commodity Futures Trading Commission's proposed framework for prediction markets, submitting a joint comment urging the agency to establish clear federal standards as activity scales and scrutiny from several states intensifies. Their support comes as prediction markets expand rapidly and state regulators increasingly seek to treat event-based contracts as gambling products. The CFTC's proposal is intended to reduce that uncertainty by clarifying when an event contract may be barred from trading on a regulated exchange. The Commission began this effort earlier this year with an advance notice requesting public input on how prediction markets should be governed. Under current law, the CFTC can review certain event contracts tied to specified activities, including war or gaming, and prohibit them if it determines they are contrary to the public interest. The proposal describes how the agency plans to apply that authority, against a backdrop of state-level actions that have pushed the existing review process beyond what the statute was designed to accommodate. In their comment, HPC and Multicoin argue that written, uniform standards are preferable to ad hoc judgments and provide the predictability needed for market participants to invest and build. They also contend prediction markets should be overseen by a single federal regulator, emphasizing that exchange-traded contracts are structurally different from gambling wagers and noting Congress placed authority with the CFTC in 2010 to avoid a fragmented, 50-state approach. The firms recommend several refinements to the proposal, including adopting a settlement-based interpretation of the term "involve," adding examples to address edge cases, and publishing the Commission's reasoning for both blocked and permitted contracts. They point to the growth of onchain markets as evidence of the need for national clarity. Hyperliquid already lists outcome-based contracts, with open interest reaching all-time highs since its May launch. They argue that technology-neutral federal rules would enable markets like these to scale within a unified national framework, anchored by standards set in advance and transparent explanations for regulatory decisions.