What to know:
- Binance.US plans to apply for a CFTC designated contract market (DCM) license next month to launch prediction markets in the U.S.
- If approved, the exchange will be able to offer futures, options, and event contracts while competing with Kalshi and Polymarket.
- The move is part of Binance.US’s recovery strategy, focusing on lower trading fees, compliance, and expanding beyond spot crypto trading.
Binance.US prepares to make its entry into the fast-growing prediction market industry in the US; it intends to apply for an authorization from the Commodity Futures Trading Commission (CFTC) to operate as a designated contract market (DCM). The application will enable the exchange to compete with existing companies like Kalshi and Polymarket.
Stephen Gregory, chief executive officer of Binance.US, disclosed at the Rare Evo conference in Las Vegas that the firm will be applying for its DCM license next month. Should it receive approval, it would be legally allowed to offer futures, options, and events to retail clients.
As reported by Eleanor Terrett, host of Crypto America, the proposed app falls under the larger recovery plans of Binance.US. Binance.US aims to recover from its current situation by reducing trading fees and introducing more products such as perpetual futures and prediction markets.
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Binance.US Expands Beyond Spot Trading
With Gregory taking over as CEO this year, Binance.US has been restructuring after regulatory setbacks by reducing almost all fees to zero, focusing on compliance, and expanding its plan for derivatives.
Prediction markets would diversify sources of income, which are now limited to spot trading, and bring in more customers to the platform since users can trade futures on the outcome of real events.
Binance.US, if approved by the CFTC, would become another entrant into the increasingly crowded space along with Kalshi and Polymarket. Gemini has a license, and Coinbase has partnered up with Kalshi in providing event contracts for Americans.
Exchange Continues Recovery After Regulatory Setbacks
This comes after the Binance Holdings $4.3 billion deal in 2023 with U.S. regulators. Former CEO Changpeng Zhao spent four months in jail and was eventually pardoned by former President Donald Trump.
Zhao still owns a majority stake in Binance.US; however, he claims that he is no longer involved in the company and only deals with technical issues. He stated that the firm seeks growth in America through product excellence and accessibility to its clients.
The spokesperson for Binance.US noted that they intend to develop into one of the key platforms in acquiring and trading digital assets through the introduction of innovative products.
Robinhood Also Looks at Prediction Markets
Prediction markets are getting more competitive. According to The Wall Street Journal, Robinhood Markets is considering working with Crypto.com to allow its prediction markets on its platform, although nothing has been decided yet.
Currently, Robinhood offers event contracts through the services of Kalshi, ForecastEx (Interactive Brokers), and Rothera. Kalshi still leads as the top U.S. prediction market platform, with sports event contracts being the most traded there.
Prediction markets are increasingly becoming an important part of the development strategy for many crypto and financial companies.
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