Late last week, the Commodities Futures Trading Commission (CFTC) ordered PredictIt to wind-down its operations by February 15, 2023.
This was a major setback for traders, academics, and industry professionals alike.
Since the CFTC’s shocking announcement, PredictIt’s users have had a slew of questions about the safety of their funds with PI, why the Biden Administration took such a punitive action in the first place, and if there is still a future for political prediction markets in the U.S.
Indeed, it’s hard to even imagine this industry without PredictIt.
But, it’s not all bad news. Here to answer your questions is PredictIt’s founder and CEO, John Phillips. Let’s begin with the big one on everyone’s mind:
John speaks at length about the regulatory process that PredictIt is currently going through. Not surprisingly, it’s ambiguous and there are a few different balls in the air. But to give you a sense of where things stand with traders’ top concerns, here are some teasers.
Be sure to watch the whole thing though.
What caused the CFTC to drop the hammer?
“There are almost too many moving parts to put your finger on one specific thing that has occurred.”
Has PredictIt broken any laws?
“We’re not going to do anything that is not legal. We’re a compliance company at heart.”
Can PredictIt be saved?
“My gut is it’s going to get worked out because it’s got to get worked out. Nobody really wants all this stuff to rush offshore.”
“There’s 6 months between now and midnight, February 15. This process is pretty straightforward. The CFTC needs to make some additional decisions, determinations on the general regulatory direction for event contract markets.”
Will PredictIt shutdown before February 15, 2023?
“We want to reduce the uncertainty in the next 6 months. PredictIt is going to continue to operate as it always has through February.”
The value of PredictIt’s traders:
“What our community of forecasters has done is validate the merits of prediction markets, not just as a way to make some money, but also as a forecasting tool.”
Does PredictIt have powerful allies defending it?
“There’s interest on the Hill.”
“Thoughtful people on Capitol Hill and elsewhere understand that there need to be some decisions made. I think those decisions are going to get made in a rational way.”
Where can traders show their support:
What is the future for political prediction markets?
“Long run, it’s going to be okay. Near term, it has to do with what the people listening to this podcast decide to do.”
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