PredictIt, the political prediction exchange once confined to a regulatory grey zone, has secured approval to become a fully licensed derivatives marketplace.
The Commodity Futures Trading Commission (CFTC) granted its operator, Aristotle, licences to operate both an exchange and a clearinghouse, providing the infrastructure needed to clear and process trades.
As reported by Bloomberg and confirmed through CFTC filings, the decision follows applications submitted in late 2021, which had been under review for several years.
For more than a decade, PredictIt had operated under a CFTC “no action” letter that shielded the company from enforcement as long as it adhered to strict conditions, including small-dollar limits and use primarily for academic research.
In 2022, however, the Biden-era CFTC rescinded the letter, alleging that PredictIt had violated those terms by expanding beyond its permitted scope.
The revocation forced the platform into a prolonged legal battle. In July, a federal court vindicated PredictIt’s position, clearing the way for continued operations.
Shortly after, the CFTC granted a revised no-action letter, permitting a limited expansion of political trading.
The full exchange and clearinghouse approvals mark a significant leap forward, placing PredictIt on firmer regulatory ground and allowing it to compete directly with newer entrants in the sector.
Over the past three years, Kalshi, Polymarket, and Crypto.com have gained CFTC approval to operate prediction markets covering everything from inflation expectations to sports championships.
By securing the same status, PredictIt can now align itself with this growing cohort of regulated exchanges rather than relying on regulatory exemptions.
The platform is expected to relaunch under the new framework in October.
CFTC and SEC look to harmonise efforts
The timing coincides with broader regulatory discussions at the intersection of financial innovation and oversight.
The Securities and Exchange Commission (SEC) and the CFTC recently issued a joint statement on harmonisation opportunities between the two agencies.
SEC Chairman Paul S. Atkins and CFTC Acting Chairman Caroline D. Pham said in the statement: “It is a new day at the SEC and the CFTC, and today we begin a long-awaited journey to provide markets the clarity they deserve.
“By working in lockstep, our two agencies can harness our nation’s unique regulatory structure into a source of strength for market participants, investors and all Americans.”
They also announced a joint roundtable for 29 September, intended to foster dialogue on areas of overlapping jurisdiction and emerging priorities.
Prediction markets may be a salient part of discussions, given their expansion and the legal ambiguities they have long presented. However, neither the SEC nor the CFTC has confirmed the agenda.
The CFTC had earlier pledged to update stakeholders on its regulatory approach to event-based contracts, but those sessions were repeatedly delayed.