Traditional finance giants Charles Schwab and Citadel Securities have revealed possible intentions to enter the crypto prediction market industry.

 

In a call with investors, Rick Wurster, chief executive of Charles Schwab, said that at some point the institution will likely offer its own prediction markets. According to Wurster, prediction markets were not of “tremendous interest” to Schwab, but he said the sector is one the company will take a hard look at and that it would be relatively straightforward to offer such products.

 

Image credit: CNBC

 

However, if Schwab does decide to enter the prediction markets industry, Wurster said it would steer away from bets in areas such as sports, politics and pop culture, adding that the firm aims to position itself as a partner for building long term wealth.

 

“Prediction markets that are not aligned to that are not something that we want to pursue,” Wurster said. “If you look at the stats on the success of gamblers, they are not strong, and people generally lose money.”

 

Citadel Securities also opened up about the possibility of entering prediction markets in the future. At a recent Semafor conference in Washington, DC, Jim Esposito, president of Citadel Securities, said the company is “absolutely keeping an eye on developments” in prediction markets.

 

Image credit: YouTube

 

Although Esposito said Citadel Securities is not there yet because there is not much liquidity in the prediction markets industry, he added that the market is likely to ramp up and scale, and that there is a possibility of the firm getting involved in the future.

 

However, like Wurster’s position on avoiding sports betting contracts, Esposito said Citadel would avoid offering sports event contracts, but signaled interest in other types of event-based contracts.

 

Why Are Sports Event Contracts Being Avoided?

Based on the statistics, sports event contracts are the largest category of contracts on prediction market platforms. According to a recent report, sports event contracts made up 87 percent, or $9.9 billion, of Kalshi’s March $11.39 billion trading volume. On Polymarket, sports event contracts generated over $120 million in 24-hour trading volume in March.

 

However, despite their potential, Charles Schwab and Citadel Securities have said they would not be offering these contracts. For Schwab, these contracts will be avoided as they do not align with the company's goal of positioning itself as a long-term wealth builder. According to Rick Wurster, the chief executive officer of Charles Schwab, people generally lose money from these contracts. The demand for these contracts is also low among Schwab’s clients.

 

Citadel has described these contracts as having thin liquidity. Regulatory uncertainty is also a concern, as the offering of sports event contracts by prediction market platforms is one of the reasons regulators have raised concerns about Polymarket, Kalshi, and other prediction market companies.

 

 

Prediction market platform Polymarket is reportedly in talks with investors to raise 400 million dollars. If successful, this would place the prediction market company at a valuation of 15 billion dollars, up from its current $9 billion.

 

While there is still no official confirmation from Polymarket regarding this news, the fundraising is expected to drive Polymarket’s growing influence in the expanding prediction market sector, giving it a competitive advantage over its competitors, particularly Kalshi.

 

This move comes a few weeks after Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange (NYSE), invested 600 million dollars into Polymarket. This followed an earlier investment of 1 billion dollars into the prediction market company a few months prior.

 

So far, Polymarket has raised over $2 billion across several fundraising rounds from venture capital firms and investors, including Intercontinental Exchange, Blockchain Capital, Polychain Capital, Dragonfly Capital, Coinbase Ventures, 1789 Capital, Ethereum co founder Vitalik Buterin, Aave founder Stani Kulechov, among several other investors.

 

Prediction Market Firms Grapple With Regulatory Uncertainty

Despite how remarkable the global prediction market sector has grown in recent times, prediction market companies still face several regulatory challenges, ranging from state level lawsuits to nationwide bans.

 

Several U.S. states, including New Jersey, Maryland, Massachusetts, and Arizona, have taken strict regulatory action against prediction market companies, with many state regulators alleging that these companies offer illegal sports event contracts. At least 12 states in the U.S. have filed civil lawsuits against prediction market companies.

 

Outside the U.S., prediction market companies have also faced strict regulatory scrutiny. Just this year alone, about four countries in Europe, Portugal, the Netherlands, Bulgaria, and Hungary, have imposed nationwide bans on Polymarket’s activities.

 

However, despite this harsh regulatory landscape, the global prediction market continues to grow. In the most recent quarter, global trading volume across prediction market companies exceeded $ 26 billion, a 90 percent increase from the previous quarter. This volume, according to the global equity research firm Bernstein, is expected to reach $1 trillion by 2030.

 

 

Hyperliquid's RWA trading just hit a new all time high, with open interest crossing $2.3 billion on its blockchain which says a lot about how much liquidity is actually flowing into real world assets through a decentralized venue. The platform has quietly become a go-to spot for trading, building apps, and launching tokens all in one place, and the RWA growth is starting to grow rapidly. It’s fees are competing with top blockchains and stable coin companies within crypto.

 

 

On March 31, Cointelegraph reported that Ripple Prime expanded its Hyperliquid integration with HIP-3. That means institutions now get seamless on-chain perpetuals on traditional assets like gold, silver, oil, and even compute prices.

 

This is the kind of bridge that allows retail to hedge oil exposure at 3 a.m on a Sunday when traditional futures are closed. The same rails powering crypto perps now handle real-world commodities that move markets worldwide. It's infrastructure that pulls capital on-chain because the UX finally matches what people expect from a modern trading venue.

 

On the prime brokerage side, a traditional S&P futures trade runs through six different entities: prime broker, FCM, CME Clearing, and so on with multiple fee layers, T+1 settlement, financing charges, and all the custody overhead that comes with it. On HIP-3, connect your wallet, post USDC margin, trade the perp, and settle instantly on-chain. One fee, self-custody, the smart contract is the clearinghouse, and the blockchain handles custody. It's making large chunks of what they actually do look pretty unnecessary, once the regulatory picture clears up. 

 

Hyperliquid's terms of service explicitly block US users, and enforce this with IP geoblocking, so if you're in the States you'll hit a wall at app.hyperliquid.xyz. The underlying protocol is fully permissionless since it's non-custodial and requires no KYC, but using it from the US still carries real regulatory risk given the CFTC's jurisdiction over leveraged perps. In February 2026 they launched a $29 million Policy Center in D.C. led by Jake Chervinsky, pushing for regulatory clarity around on-chain derivatives. Until something like the CLARITY Act or formal CFTC guidance moves things forward, the restriction is basically the protocol protecting itself while it keeps running 24/7 for the rest of the world. For US builders and investors, the play is watching that policy push closely because when the rails open, the infrastructure is already battle tested and ready to go.

 

Non-crypto assets on Hyperliquid with HIP-3 markets now cover licensed indices like the S&P 500 and Nasdaq 100, individual equities, commodities, and even compute perps tied to GPU rental rates for H100, H200, and A100 chips through projects like Global Compute Index and Hyperbolic. At peak moments these non-crypto pairs have accounted for up to 45% of total volume, with HIP-3 open interest recently sitting around $1.9 billion.

 

Late last year, Aster looked like it could replace Hyperliquid with BNB Chain speed, incentives, and early buzz that some called the “Hyperliquid killer.” Hyperliquid has pulled ahead in TVL, open interest, fees, and real value returned to holders. Aster remains solid, yet Hyperliquid’s dedicated L1 edge with tighter spreads, deeper books, and consistent performance has widened the gap.

 

 

@CosimoCapital posted a thread making a pretty compelling case for why a future proposal of HIP-4 prediction markets could be a serious unlock. The core problem with most prediction market platforms is thin liquidity and parlays that just don't work because every market is isolated from everything else. Hyperliquid flips that by letting prediction markets tap into the same infrastructure already handling massive perpetuals and commodities volume. "When prediction markets share a unified liquidity pool with perpetual markets," Cosimo wrote, "the parlay math transforms completely." One account, cross-margined across oil perps, equity moves, and event outcomes, all settling instantly. It's not just another betting app. It could end up being "the everything market for global event risk."

 

 

This opens up some genuinely interesting scenarios with macro hedges like "if CPI beats and the Fed holds and BTC closes green," or geopolitical risk desks chaining election outcomes to commodity moves, parametric insurance, treasury automation, you name it. Every multi-leg position multiplies fee events too, so five legs means five burns, which turns HIP-4 volume into structural HYPE supply reduction over time. Hyperliquid is pulling in roughly $700 million in annualized trading fees from its perpetuals and spot markets, and around 97 to 99% of it flows automatically into the Assistance Fund, which runs daily HYPE buybacks on a continuous basis. There's constant structural demand and deflationary pressure on circulating supply whether the market is up, down, or sideways.

 

And yet CEXs still dominate headlines, but Hyperliquid delivers the speed and depth traders love as everything is transparent, on-chain, and runs non-stop. For builders shipping interoperability tools, this is the tool that makes cross-border and cross-asset trading feel native.

 

Hyperliquid is quietly becoming a 24/7 venue where crypto-native capital meets macro and physical assets without intermediaries. The current restriction is more about protecting the protocol long term than anything else, and the policy push happening in DC is very much part of the plan. Once clarity comes, the floodgates will open and give a much needed update to trading.

 

 

Binance, the world’s largest cryptocurrency exchange, has introduced into its wallet application, prediction market, a new feature that allows users to participate in probability-based markets directly from the Binance wallet app. 

 

This feature was made possible through the integration of Predict.fun, an independent decentralized prediction market platform built on the BNB Chain, with Binance explicitly stating the integration of more prediction market platforms into its app in the future. 

 

With the integration of Predict.fun into its wallet app as well as other future prediction market integration, Binance aims to tap into the over $20 billion prediction markets volume, going toe-to-toe with giant prediction market platforms Kalshi and Polymarket which both account for 85–90% of the total global prediction market volume.

 

To encourage the mass adoption and use of this new prediction market feature, Binance is offering a gasless trading experience for all users. Thus, all trading fees incurred will be sponsored and catered for Binance itself, thereby making it very easy for its over 300 million users tap into the growing crypto prediction markets. 

 

Image credit: Binance

 

The Binance prediction market feature will also support market and limit orders, allowing traders execute trades immediately at the current best market price or leave immediately, without delay, as well as allowing traders execute trades at their specified price or even better. 

 

The Current State of Prediction Markets

Crypto prediction markets have grown rapidly in recent times, evolving from a niche segment of the crypto industry into a major sector in global finance. The global monthly trading volume across prediction market platforms has consistently exceeded 20 billion dollars, with last month recording approximately 25.7 billion dollars in trading volume.

 

Despite the high monthly trading volume and the growing number of unique crypto wallets actively trading across different platforms, prediction market companies have faced several regulatory challenges. This is especially true for the two largest platforms, Kalshi and Polymarket, whose trading volumes together account for about 92 to 93 percent of global prediction market activity.

 

Although the Commodity Futures Trading Commission, the federal regulator in the United States, has recently moved to defend prediction market companies from strict regulatory actions imposed by several states, the activities of these companies remain restricted in at least 11 states.

 

The services of Polymarket remain blocked in about 33 countries, while Kalshi is restricted in about 50 jurisdictions, although it is still available in roughly 140 countries.

 

 

Polymarket just announced what it is calling the biggest infrastructure change in its history. The on-chain prediction market platform is rolling out a rebuilt trading engine, a new smart contract architecture, and its own stablecoin, Polymarket USD, over the next two to three weeks. Whether you follow prediction markets closely or just heard about Polymarket during the last election cycle, this is a huge shift on how the protocol operates.

 

A New Stablecoin Built for the Platform

The centerpiece of the upgrade is Polymarket USD, a new collateral token that will replace the platform's current use of USDC.e. If you're not familiar, USDC.e is a bridged version of Circle's USDC stablecoin. It works fine, mostly, but it relies on cross-chain bridge infrastructure to exist on Polygon, which adds friction and a layer of risk that a platform handling this much trading volume probably shouldn't be comfortable with.

 

Polymarket USD will be backed 1:1 with Circle's native USDC, giving the company direct control over its settlement infrastructure for the first time. That's a bigger deal than it sounds. Control over your own collateral token means tighter liquidity management, more predictable settlement, and a foundation for whatever the company wants to build next.

 

For most regular users, the transition is supposed to be seamless. The platform's frontend will handle the conversion automatically with a one-time approval. Advanced users and developers running bots or API integrations are a different story. Those folks will need to update their SDKs and manually call a wrap function on the new Collateral Onramp contract to convert funds into Polymarket USD. The team says it will give at least a week's advance notice before any order book cancellations happen.

 

The Exchange Itself Is Getting a Full Rebuild

Beyond the stablecoin, Polymarket is launching CTF Exchange V2, a redesigned matching engine that processes orders faster and at lower gas costs. The updated Central Limit Order Book blends off-chain order placement with on-chain settlement.. The new order structure trims should reduce complexity for developers and improve execution across the board.

 

One notable addition is EIP-1271 support, which lets smart contract wallets, such as multi-signature wallets, interact with the platform directly without needing intermediaries.

 

The POLY Token Question

The announcement has predictably reignited speculation about POLY, Polymarket's long-rumored native governance token. The platform's chief marketing officer confirmed back in October 2025 that a POLY airdrop is in the works, contingent on completing a strong U.S. relaunch. But Monday's announcement makes no mention of POLY at all, and ironically... the odds on Polymarket itself currently put the chance of a POLY launch before May at just 11%

 

The speculation isn't really unfounded. Polymarket has historically relied on UMA's optimistic oracle system to resolve market outcomes, a setup where token holders vote to settle disputes. That system has faced criticism, particularly during geopolitically sensitive markets, where large token holders can exert outsized influence. A native governance token could eventually allow Polymarket to bring dispute resolution in-house, separating trading activity from outcome validation. Whether that's still  the plan remains unclear.

 

What's Next For Polymarket

The company, founded in 2020, is reportedly seeking a new funding round at a valuation near $20 billion. Last month, Intercontinental Exchange, the parent company of the New York Stock Exchange, made a $600 million direct cash investment in the platform. That type of institutional backing puts a lot of pressure on the infrastructure to perform like a proper exchange.

 

Polymarket also registered with the Commodity Futures Trading Commission in July 2025 after shutting down U.S. operations in 2022. An invite-only U.S. version of the platform has since launched under a regulatory no-action letter. The migration to a CFTC-registered model, combined with building settlement infrastructure around a regulated stablecoin issuer like Circle, is consistent with a company that wants to operate in the U.S. long-term, not just avoid regulators.

 

The rollout is expected to happen over the next two to three weeks. But there are some real risks here: any smart contract migration carries execution risk, and there could be liquidity fragmentation as traders straddle two collateral systems during the transition window. Whether Polymarket USD will face third-party reserve audits comparable to what Circle applies to native USDC is also an open question.

 

Still, if the upgrade goes smoothly, Polymarket will emerge with a cleaner technical foundation, lower transaction costs, and better tools for institutional participants. All of that should translate into significantly higher trading volume and a broader institutional footprint. But these next few weeks should tell us a lot.

 

The Commodity Futures Trading Commission (CFTC) and the U.S. Department of Justice (DOJ) have filed parallel federal lawsuits against the states of Illinois, Connecticut, and Arizona, as well as their gaming regulators, over the federal government’s right to regulate prediction markets.

 

The filings, which were made on Thursday, aim to prevent these states from restricting prediction market companies and enforcing state-level rules on them. The CFTC claims that it possesses exclusive regulatory authority over prediction markets and says it will defend participants from what it describes as overzealous state regulators.

 

With this move, the CFTC seeks to halt strict regulatory actions taken by these states’ authorities, including several cease-and-desist letters issued to prediction market companies such as Kalshi and Polymarket.

 

What These States Did

Earlier this year, the Arizona Attorney General filed criminal charges against KalshiEx LLC and Kalshi Trading LLC, accusing them of operating an illegal gambling business without a state license and violating state election wagering laws.

 

In December 2025, the Connecticut Department of Consumer Protection (DCP) issued cease-and-desist orders to multiple prediction market platforms, including Kalshi, Crypto.com, and Robinhood, accusing them of offering illegal sports event contracts and operating unlicensed online gambling operations within the state.

 

In April 2025, the Illinois Gaming Board (IGB) issued cease-and-desist letters to Kalshi, Polymarket, and Crypto.com, asserting that the sports event contracts offered by these platforms constituted illegal wagering under Illinois gambling law.

 

In the court filing against Illinois Governor JB Pritzker, Attorney General Kwame Raoul, and the Illinois Gaming Board, the U.S. commodities regulator argues that event contracts traded on approved exchanges qualify as “swaps” under federal law, not gambling. The regulator also contends that Congress granted it exclusive jurisdiction and that Illinois’s insistence on licensing requirements amounts to an attempt to block federally regulated exchanges from operating.

 

Image credit: courtlistener

 

CFTC Acting Chair Michael Selig reiterated in a post on X that the CFTC has exclusive authority to regulate prediction market activity in the United States, and confirmed that the lawsuit was jointly filed by his agency and the U.S. Department of Justice.

 

 

Crackdown on Prediction Market Intensifies

Prediction market companies have faced intense crackdowns and regulatory restrictions in the U.S. in recent times. There are currently over 20 nationwide lawsuits filed against prediction market companies by regulators from several states, including New York, Washington, Nevada, and Massachusetts.

 

Outside the U.S., there have also been several strict regulatory actions by authorities in multiple countries, with many regulators accusing prediction market companies, especially Polymarket and Kalshi, of operating unregistered gambling activities and offering illegal sports event contracts in their jurisdictions.

 

 

Prediction markets used to be weird section of the internet where die-hard political junkies placed small bets on election outcomes. That version appears to be gone. According to new data from blockchain intelligence firm TRM Labs, prediction markets have now cracked $20 billion in monthly trading volume, and the category driving most of that activity is not sports or elections but geopolitics.

 

That says something real about how the world has changed. Traders are no longer just wagering on who wins a Senate seat. They are pricing the odds of a Russia-Ukraine ceasefire, assessing the likelihood of a Chinese military action in Taiwan, and putting money on whether Iran's Supreme Leader survives the year. These are not just fringe markets. They are, increasingly, some of the most liquid on the entire platform landscape.

 

The shift reflects a broader transformation in how both retail and institutional participants are using prediction markets. According to TRM Labs, geopolitics now accounts for the majority of activity by volume, a reversal from even 18 months ago when political elections and sports dominated the leaderboard. The firm's report points to a world in which macro uncertainty, military escalation, and trade conflict have become reliable generators of trading interest.

 

The numbers behind this story are hard to argue with. The global prediction market industry processed roughly $63.5 billion in total notional trading volume across 2025, up from about $15.8 billion the year prior. Yes, that's correct...four times the amount. In a single year. In 2022, the entire sector did around $500 million. The growth is extraordinary.

 

Two platforms sit at the center of all this. Polymarket and Kalshi together accounted for approximately 97.5 percent of total industry volume in 2025, according to aggregated data tracked by multiple research outlets. Kalshi, the CFTC-regulated exchange backed by a $1 billion Series E led by Paradigm, processed over $23 billion in notional volume last year. Polymarket, the blockchain-based platform that operates globally and recently cleared its U.S. legal hurdles following the change in administration, brought in comparable figures, though some of its reported numbers are complicated by a structural double-counting issue flagged by Paradigm in December.

 

 

By February 2026, the combined monthly run rate for the two platforms had climbed to roughly $16.8 billion, with Kalshi accounting for about $9.8 billion of that and Polymarket the remaining $7 billion. At that pace, the sector is on track to top $200 billion in annual volume, with some forecasts reaching $325 billion if growth continues. A report cited by CNBC projects prediction markets could approach $1.1 trillion in annual volume by the end of the decade.

 

What makes the TRM Labs data particularly interesting is the composition of what is being traded. The firm has been tracking prediction market activity not just for volume but for what that volume reveals about where geopolitical risk is being priced. As the Ukraine conflict has dragged on and tariff uncertainty under the current U.S. administration has remained elevated, contracts tied to those outcomes have attracted serious capital. Russia-Ukraine ceasefire contracts on Polymarket have shifted repeatedly in response to diplomatic signals, functioning in a way that closely mirrors how traditional derivatives respond to macro news. Some institutional desks now watch these contracts alongside oil futures and sovereign bond spreads.

 

The Council on Foreign Relations noted earlier this year that prediction markets had demonstrated real forecasting credibility in a high-profile case. When the Trump administration was weighing strikes on Iran's nuclear program in mid-2025, many analysts dismissed the prospect as unlikely. Prediction markets assigned a 58 percent probability to strikes by the end of that week. Seven B-2 stealth bombers were already airborne.

 

That kind of accuracy does not happen every time, and anyone betting on these platforms should know that. Liquidity constraints still limit reliability on smaller or more obscure contracts, and the platforms have faced criticism over resolution disputes and rules design that has occasionally left winning bettors on the losing side. But on major geopolitical events where information is widely available and traders are motivated to get it right, the markets have shown a notable ability to aggregate collective judgment quickly.

 

The regulatory backdrop in the United States has shifted considerably in the past year. The Biden-era hostility to prediction markets has given way to a CFTC posture that is, by most accounts, far more permissive. Polymarket, which had been operating outside the U.S. and faced a federal investigation that included a raid on its founder's apartment, was cleared to operate domestically in late 2025. Kalshi, which had won its own legal battle over political markets in late 2024, has since integrated with Robinhood and Webull, putting its contracts in front of tens of millions of retail brokerage users.

 

The competition is intensifying. DraftKings and FanDuel have entered prediction markets, though analysts have suggested the two sports betting giants may have arrived too late to challenge Polymarket and Kalshi's entrenched liquidity. CertiK, the blockchain security firm, published a report in early 2026 flagging structural questions about sustainability once platform incentives fade, and noted that wash trading had inflated some Polymarket volumes in prior periods. Those are legitimate concerns for anyone trying to assess whether the sector's growth is as clean as the headline numbers suggest.

 

Still, the direction of travel is clear. Prediction markets have moved past the stage where they can be dismissed as a gambling novelty. The data from TRM Labs, taken alongside the broader market statistics, describes a financial layer that is increasingly responsive to the same forces that move bond markets and currency pairs. Geopolitics has always moved markets. What is new is that there is now a market specifically for geopolitics itself.

 

Gemini Space Station (NASDAQ: GEMI) got a real boost from Wall Street on Thursday evening. Shares jumped roughly 7% in after-hours trading, climbing to $6.45 after the company reported its fourth-quarter results and laid out a vision for where it is headed next. For a stock that has been taking a real beating the last few months, this feels like it could be a turning point, or at least the beginning of one.

 

The company went public on the Nasdaq in September 2025, raising around $425 million and generating a lot of excitement. The stock has since pulled back significantly, but Thursday's earnings report finally gave investors something that they can feel good about again.

 

 

Gemini Is Moving Beyond Being Just A Crypto Exchange

The headline from the results was not actually about trading at all. For the first time ever, revenue from Gemini's services and interest-based products surpassed what it made from trading fees. Services revenue rose 33% compared to the prior quarter, hitting $26.5 million. That might sound like dry accounting detail, but it matters a lot. It means Gemini is no longer entirely dependent on whether people are actively buying and selling crypto on any given day. That is a big deal for a business trying to grow steadily rather than just riding the waves of a notoriously volatile market.

 

A lot of that services growth came from Gemini's credit card, which functions like a rewards card but pays cashback in cryptocurrency instead of airline miles or cash. That product processed over $1.2 billion in transactions throughout 2025. Total revenue for the full year came in at $179.6 million, up 26% from the year before, and services revenue more than doubled over the same period. The company is building something that looks less like a pure-play crypto exchange and more like a broader financial platform, one that works even when the crypto market is quiet.

 

Beyond the credit card, the move that has really captured investors' imaginations is Gemini's push into prediction markets.

 

Gemini launched its prediction markets product, called Gemini Predictions, in December 2025 after its affiliate Gemini Titan received official approval from the U.S. Commodity Futures Trading Commission. This approval was five years in the making; the company first applied for the license back in March 2020. Receiving it placed Gemini in a very small club of fully regulated prediction market operators in the United States.

 

The early traction is genuinely encouraging. More than 15,000 users have already traded contracts covering categories from crypto prices to politics to sports. In the shareholder letter published Thursday, Tyler and Cameron Winklevoss made a bold pitch for why they believe this could be one of the most significant financial products in a generation. They argue that prediction markets forecast the future more accurately and more quickly than traditional experts, pollsters, or media organizations, and that Gemini is positioned at the center of that shift. It is an ambitious claim, but the regulatory foundation they have built gives them a real head start over most competitors.

 

When the CFTC approval was announced back in December, GEMI shares surged nearly 32% in a single session. The market clearly sees the prediction markets business as a meaningful growth engine, and Thursday's results confirmed that the product is gaining real users not just the new, shiny thing with a fancy launch.

 

 

Focusing On What Works

One of the things investors responded well to on Thursday was evidence that management is making tough decisions to streamline the business. In February, Gemini announced it would be cutting roughly 25% of its global workforce and closing its exchange operations in the United Kingdom, the European Union, and Australia. It is closing those regional operations and partnering with eToro, another regulated trading platform, to help affected customers transfer their assets.

 

The Winklevoss brothers described the move plainly: those international markets were hard to compete in, and trying to win them was stretching the company too thin. By pulling back to focus on the U.S., where Gemini has the strongest regulatory footing and the largest user base, management believes it can move faster and reach profitability sooner. The restructuring costs around $11 million, most of it in the first quarter of 2026, but the expected savings over time are significantly larger. 

 

The company's full-year 2025 revenue of $179.6 million came in at the top end of its own preliminary estimates, a small but positive sign that the business is not deteriorating further. Operating expenses were higher than many investors would have liked, but the direction of travel looks more controlled heading into 2026 with the restructuring largely complete.

 

 

What's Next?

Gemini is not without its challenges. The company is dealing with several class action lawsuits filed by shareholders who believe the IPO documents did not fully reflect the scale of the restructuring that was coming. A management conference call is scheduled for Friday morning, and investors will want straight answers on the legal strategy, a timeline for replacing several senior executives who departed in February, and more detail on how fast the prediction markets business is actually growing.

 

Still, the picture Thursday evening was meaningfully better than it has been for most of the past six months. The company is generating real growth in non-trading revenue, it has a licensed and operational prediction markets platform at a time when that category is attracting serious investor and user interest, and management is finally showing a willingness to make hard cuts rather than try to compete on every front at once.

 

Prediction markets as a category have grown explosively over the past couple of years. Platforms like Kalshi and Polymarket have demonstrated real user demand, and regulators under the current administration have signaled a permissive approach to the space. Gemini's CFTC license gives it a compliance advantage that most rivals cannot replicate quickly, and its existing crypto user base is a ready-made pool of customers who already understand event-based trading.

 

Whether Gemini can fully execute on the vision Tyler and Cameron Winklevoss have laid out is still an open question. But for the first time in a while, Thursday's report gave investors something to point to beyond the headline loss number, and the after-hours market seemed to appreciate that. The stock sits more than 75% below its IPO price, so there is a lot of ground to recover. A rerating like that does not happen overnight. What Thursday showed, at least, is that the foundation for one might finally be taking shape.

 

A federal court in Ohio has denied a motion filed by prediction market company Kalshi to stop state regulators from overseeing sports contracts on its platform.

 

On Monday, Chief Judge Sarah Morrison of the U.S. District Court for the Southern District of Ohio rejected Kalshi’s request for a preliminary injunction that would have blocked the Ohio Casino Control Commission and the state attorney general from regulating the sports betting contracts offered by Kalshi.

 

Image credit: CourtListener

 

 

The judge ruled that Kalshi failed to prove its sports event contracts were exclusively supervised by the Commodity Futures Trading Commission (CFTC).

 

“Even if this court were to find that sports event contracts are swaps subject to the CFTC’s exclusive jurisdiction, Kalshi has not shown that the Commodity Exchange Act (CEA) would necessarily preempt Ohio’s sports gambling laws,” the opinion and order stated.

 

“Kalshi argues that Ohio’s sports gambling laws are field- and conflict-preempted by the CEA when it comes to sports event contracts traded on its exchange [...] Kalshi fails to establish that Congress intended the CEA to preempt state laws on sports gambling,” the opinion and order added.

 

Image credit: Court Listener

 

For clarity, here's a breakdown of what's going on:

• Kalshi asked an Ohio court to block the Ohio Casino Control Commission and the state’s attorney general from regulating its sports contracts, arguing that the contracts were already under the oversight of the CFTC, a federal regulator.
• The court denied the request, stating that Kalshi had not proven that the sports contracts on its platform were actually being regulated by the CFTC.
• The court further noted that although the CFTC had not taken action against the contracts, that does not make them legal under federal law.

 

 

Kalshi's Back-and-Forth Battle With Regulation

Despite CFTC Chair Michael Selig stating in February that federal regulators have exclusive jurisdiction over prediction markets, Kalshi and other prediction market companies continue to face challenges from state regulators seeking oversight.

 

In March 2025, the Nevada Gaming Control Board issued a cease-and-desist order against Kalshi, ruling that its sports event contracts constituted illegal sports wagers. Kalshi responded by filing a federal lawsuit, which resulted in a temporary restraining order and preliminary injunction, allowing the company to continue operating in the state.

 

However, a federal judge in Nevada later lifted the preliminary injunction, ruling that Kalshi must comply with the state’s gaming regulations.

 

Earlier this year, the Tennessee Sports Wagering Council sent cease-and-desist letters to Kalshi and other prediction market companies, stating that offering contracts on sports events was illegal in the state and constituted unlawful sports betting.

 

In response, Kalshi filed a lawsuit against state regulators in federal court and obtained a temporary restraining order preventing Tennessee authorities from enforcing the cease-and-desist order.

 

 

Polymarket has gone on the offensive.

 

The crypto-powered prediction market has filed a federal lawsuit against the state of Massachusetts, arguing that state regulators are overstepping their authority as they move to block sports-related prediction markets. The case puts Polymarket on a collision course with state gambling laws and could determine how far U.S. states can go in policing a fast-growing corner of crypto-finance.

 

At stake is a much bigger question than one company’s business model. The lawsuit tests whether prediction markets should be treated as federally regulated financial instruments or as another form of sports betting that states can license, restrict, or ban outright.

 

 

A Growing Clash Between States and Prediction Markets

Prediction markets allow users to trade on the probability of future events. Elections, economic data releases, interest rate decisions, and increasingly, sports outcomes. Traders buy and sell contracts that pay out based on what actually happens, with prices shifting in real time as sentiment changes.

 

Supporters argue these markets are closer to financial derivatives than gambling. Critics, especially state regulators, say sports-based contracts look and feel like wagers, regardless of how they are structured.

 

That tension has been simmering for years, but it boiled over recently when Massachusetts moved to shut down Kalshi’s sports-related markets. Kalshi operates as a federally regulated exchange under the Commodity Futures Trading Commission, yet a Massachusetts court sided with the state, granting regulators the power to block those contracts locally.

 

For Polymarket, that ruling was a warning shot.

 

 

Why Massachusetts Matters

Massachusetts has become ground zero for the state-level pushback. The state’s attorney general has argued that sports prediction contracts violate local gambling laws and should not be allowed without a state-issued license. Courts have so far been receptive to that argument, at least on an interim basis.

 

The implications extend far beyond one state. Regulators in Nevada and other jurisdictions have cited the Massachusetts case as justification for their own enforcement actions. If one state can successfully reclassify prediction markets as gambling, others are likely to follow.

 

Polymarket’s lawsuit is designed to stop that domino effect.

 

 

Polymarket’s Core Argument

Polymarket’s legal case is straightforward and ambitious.

 

The company argues that event-based contracts fall squarely under federal commodities law and that the CFTC has exclusive authority to regulate them. If that view holds, states would be barred from using gambling statutes to restrict or ban prediction markets, even when those markets involve sports.

 

In other words, Polymarket is asking the court to draw a hard line between federally regulated markets and state gambling oversight.

 

The lawsuit also reflects a strategic shift. Rather than waiting for a cease-and-desist or injunction, Polymarket is preemptively seeking judicial clarity before Massachusetts or other states can formally block its offerings.

 

 

Sports Markets Are the Flashpoint

Sports contracts sit at the center of the controversy for a reason. Unlike political or economic forecasts, sports betting is already heavily regulated at the state level, with billions in tax revenue flowing through licensed sportsbooks.

 

State officials argue that prediction markets offering contracts on game outcomes undermine that system and create an unlicensed alternative to traditional betting.

 

Prediction market operators counter that their products are fundamentally different. Prices are set by traders, not oddsmakers. Positions can be bought and sold before outcomes are known. Risk is distributed across a market, not absorbed by a house.

 

Courts have not yet settled which interpretation carries more weight.

 

 

The Broader Stakes for Crypto and Finance

The outcome of Polymarket’s lawsuit could shape the future of prediction markets in the U.S. If states prevail, platforms may be forced to geo-block large portions of the country or abandon sports contracts entirely. That would likely slow growth and limit mainstream adoption.

 

If Polymarket wins, it could establish a powerful precedent. Federal preemption would give prediction markets a clearer regulatory runway and could encourage more institutional participation in event-based trading.

 

There is also a competitive angle. Traditional sportsbooks operate under state licenses and strict compliance regimes. Prediction markets that fall outside those systems could disrupt the sports betting industry, which has expanded rapidly since the repeal of PASPA.

 

 

The Bottom Line

The case is still in its early stages, but the direction is clear. Prediction markets are no longer operating in a gray area that regulators are willing to ignore.

 

As states push back and platforms respond with federal lawsuits, the U.S. is heading toward a defining legal moment for event-based markets. Whether they end up regulated like derivatives or treated like gambling will determine not just where these platforms can operate, but what kind of products they can offer at all.

 

For now, Polymarket has drawn its line. The courts will decide how far states can go in crossing it.

 

 

Crypto.com is leaning harder into prediction markets, and it is doing so with a clear message: this is no longer a side experiment.

 

The exchange has launched OG, a standalone prediction markets app that pulls event trading out of the main Crypto.com platform and gives it its own dedicated product. The move comes at a moment when prediction markets are not just growing, but accelerating, driven by sports, politics, and a broader appetite for trading real-world outcomes.

 

For Crypto.com, spinning prediction markets into their own app is a signal that this category is starting to matter in a way it did not before.

 

 

Why Crypto.com Is Breaking Prediction Markets Out on Their Own

OG focuses on event contracts that allow users to trade on the outcome of future events, starting with high-profile sports like the Super Bowl. Over time, the company says it plans to expand into financial events, politics, entertainment, and culture.

 

What sets OG apart from many crypto-native prediction platforms is its regulatory structure. The contracts are offered through Crypto.com’s U.S. derivatives arm, which operates under federal oversight. That positioning allows Crypto.com to frame prediction markets as regulated financial products rather than gambling, a distinction that has become increasingly important in the U.S.

 

There is also a product reason for the separation. Prediction markets behave differently than spot crypto trading. They move faster, they are driven by opinion and information flow, and they tend to be more social by nature. OG leans into that with features like leaderboards and community-style engagement, along with aggressive incentives aimed at onboarding early users.

 

Crypto.com has used that playbook before, and it is betting it works again here.

 

 

Prediction Markets Are Booming

Prediction markets are seeing record activity across the industry. Recent data shows combined monthly trading volume on leading platforms Kalshi and Polymarket has climbed for six straight months, rising from roughly $2 billion last August to nearly $17.5 billion in January.

 

That growth has been fueled by a mix of major sports events, political cycles, and growing interest in markets that reflect real-world probabilities rather than token price action. For many users, trading on whether something will happen feels more intuitive than trading whether a coin will go up or down.

 

Sports, in particular, have become an entry point. They are familiar, emotionally charged, and easy to understand. From there, users often branch into macroeconomic events, policy decisions, and cultural moments that attract attention well beyond crypto.

 

 

How Event Trading Actually Works

At its core, prediction markets allow users to buy and sell positions tied to whether an event happens or not. Prices move based on collective belief. A contract trading at 65 cents implies the market sees about a 65 percent chance of that outcome occurring.

 

As new information enters the market, whether it is an injury report, polling data, or an economic release, prices adjust in real time.

 

In regulated environments, these contracts are treated as derivatives. That classification is what allows companies like Crypto.com to operate nationally, rather than navigating a patchwork of state-level gambling rules. It is also what opens the door, at least in theory, to more advanced features like leverage and margin trading on event outcomes.

 

Crypto.com has signaled interest in going down that path, pending regulatory approval.

 

 

Regulation Is Becoming the Real Battleground

As prediction markets grow, regulation has become the defining line between platforms.

 

Some operate entirely outside the U.S. framework, relying on crypto-native liquidity and offshore structures. Others are betting that long-term scale depends on regulatory clarity, even if that means slower iteration and tighter constraints.

 

Crypto.com has clearly chosen the second route. By anchoring OG to a federally regulated derivatives entity, the company gains credibility with regulators and institutions, and potentially access to a much larger user base.

 

That does not eliminate risk. Legal interpretations continue to evolve, and prediction markets still sit in an uncomfortable gray area between finance and betting. But for now, regulation looks less like a constraint and more like a competitive advantage.

 

Kalshi and Polymarket have established themselves as leaders, particularly around political and macro events. Other major exchanges are watching closely, and in some cases preparing their own entries. Prediction markets offer something many crypto products struggle with: relevance to people who do not care about crypto prices.

 

Crypto.com’s advantage is distribution. The company already knows how to onboard millions of users through mobile-first products, and OG is clearly designed to plug into that existing funnel.

 

Whether that is enough to stand out in this crowded field remains an open question.

 

 

The Bottom Line

Prediction markets have moved out of the margins and into the center of the crypto conversation.

 

Crypto.com’s launch of OG reflects a broader shift in how exchanges are thinking about growth. Not everything needs to revolve around tokens. Not every product needs to look like a traditional exchange. The fact that Crypto.com has a huge user base as an traditional exchange definitely makes this latest move smart, and it is certainly following the trend of exchanges becoming more than just a place to buy and sell. They are beginning to offer a full suite of products for an ever-growing customer base.

 

By turning real-world events into tradable markets, prediction platforms tap directly into attention, opinion, and information flow. If OG succeeds, it could help push prediction markets...and Crypto.com even more in to the mainstream.

Tennessee Orders Kalshi, Polymarket, and Crypto.com to Halt Sports Prediction Contracts

 

Tennessee regulators have ordered Kalshi, Polymarket, and Crypto.com to immediately stop offering sports-related prediction contracts to residents of the state, escalating a growing conflict between state gambling authorities and federally regulated prediction markets.

The Tennessee Sports Wagering Council issued cease-and-desist orders on January 9, demanding that the three platforms halt all sports event contracts, void any open positions tied to Tennessee users, and refund customer funds by the end of the month.

State officials argue the products function as unlicensed sports betting under Tennessee law, regardless of how the companies describe them.

The move places Tennessee alongside a growing list of states pushing back against prediction markets that allow users to trade contracts based on the outcomes of sporting events, elections, or real-world events. While the platforms frame these products as financial instruments, state regulators increasingly see them as gambling by another name.

 

What Tennessee Is Demanding

According to the orders, Kalshi, Polymarket, and Crypto.com must immediately cease offering sports contracts to Tennessee residents. Any existing sports-related contracts must be canceled, and all funds deposited by users in the state must be returned by January 31.

Failure to comply could expose the companies to civil penalties, injunctions, and possible criminal enforcement under Tennessee’s sports gaming laws.

The council’s position is straightforward. If money is being risked on the outcome of a sporting event, the state considers it sports wagering, which requires a license, tax payments, and adherence to consumer protection rules.

 

The Regulatory Fault Line

At the heart of the dispute is a long-running jurisdictional battle between state gambling regulators and the federal framework governing derivatives and commodities trading.

Kalshi and Polymarket operate under federal oversight tied to commodities regulation, and Crypto.com has positioned its event contracts as a similar financial product. The companies argue that their platforms fall outside traditional sports betting laws and should be regulated at the federal level.

Tennessee, like several other states, rejects that argument. State officials maintain that federal oversight does not override state authority when it comes to gambling conducted within state borders.

This disagreement has become one of the most contentious regulatory issues facing crypto-adjacent markets in the U.S.

 

A Pattern Across the States

Tennessee’s action is not an isolated case. Over the past year, multiple states have issued warnings or cease-and-desist orders targeting prediction markets tied to sports outcomes. Recently, Coinbase filed suit against Connecticut, Michigan, and Illinois. Those states argue that Coinbase's prediction markets amount to illegal gambling and are attempting to ban them there.

Gaming regulators in states such as Nevada, New Jersey, Maryland, Ohio, and Illinois have raised similar concerns, arguing that prediction markets undermine state-regulated sports betting ecosystems while avoiding licensing requirements and taxes.

In some cases, platforms have pulled back voluntarily. In others, companies have opted to fight.

Kalshi has already challenged similar enforcement actions in court, arguing that state gambling laws are being improperly applied to federally regulated markets. The outcome of those cases could shape the future of prediction markets nationwide.

 

Why States Are Pushing Back Now

State regulators say the issue is not just about definitions, but about consumer protection and regulatory consistency.

Licensed sportsbooks are required to meet strict standards related to age verification, responsible gambling tools, fund segregation, and auditing. States argue that prediction markets offering sports contracts operate outside those guardrails while competing for the same customers.

There is also growing concern that prediction markets blur the line between financial trading and gambling in ways existing laws were never designed to address.

For regulators, allowing these products to operate unchecked could weaken the authority of state gaming frameworks that were carefully built following the legalization of sports betting.

 

What Happens Next

The Tennessee order adds new pressure on Kalshi, Polymarket, and Crypto.com at a time when prediction markets are expanding rapidly and attracting increased attention from both traders and policymakers.

The companies could comply and exit the state, challenge the order in court, or push for clearer federal guidance that limits states’ ability to intervene.

Until that happens, the industry remains stuck in a regulatory gray zone, where legality depends less on federal approval and more on how individual states choose to interpret decades-old gambling laws.

 

For crypto-linked prediction markets, Tennessee’s action is another reminder that regulatory risk in the U.S. remains fragmented, unpredictable, and increasingly aggressive.