A company called Railbird has been granted status by the US derivatives regulator to act as a designated contract market (DCM).
This, the business said in a release, clears the way for it to launch a regulated futures exchange focused on real-world event contracts.
Railbird Exchange, LLC received approval from the US Commodity Futures Trading Commission (CFTC) on 13 June and plans to begin trading later this year.
The platform will enable users to buy and sell contracts that pay out based on the outcome of events spanning economics, politics, entertainment, and culture.
CEO and co-founder Miles Saffran said: “Securing this designation is a pivotal milestone for Railbird. There is real demand for people to put their money behind their views, and we are excited to help shape this space from the ground up.”
Co-founder and COO Edward Tian added: “Event contracts represent a largely untapped opportunity for individuals and businesses alike to hedge risk. We are looking forward to allowing our users to apply the power of capital markets to everything from daily news to societal changes.”
The New York-based firm has partnered with QC Clearing, LLC to provide clearing services.
Railbird was founded in 2021 and is a graduate of the Winter 2022 Y Combinator accelerator programme. Its leadership team includes alumni from hedge fund Point72, Coinbase, and energy trading giant Vitol.
Notable figures involved include former CFTC Commissioner Dawn Stump and Ron Oppenheimer, previously general counsel at Vitol, who now sit on Railbird’s board.
Railbird hints at sports contracts
In the release, the business said sports represented one possible opportunity.
The status of sports event-based contracts, currently offered Kalshi, Robinhood and Crypto.com, is controversial and has been challenged by state gaming regulators and attorneys general, who have argued it represents unlicensed sports betting.
Alongside Railbird, a company called The Quanta Exchange, Inc, also received CFTC approved status as a DCM at the end of last month, though it is unclear if the company plans to begin trading event contracts.