Two Democratic lawmakers introduced legislation on Tuesday to ban prediction market contracts tied to war, death, and assassination, even as the CFTC announced plans to expand the regulatory framework governing the sector.
The bicameral bill seeks to amend the Commodity Exchange Act to explicitly prohibit any CFTC-registered entity from listing contracts that involve, relate to, or reference terrorism, assassination, war, or an individual's death.
I’m introducing a bill to ban bets on war and death in prediction markets.
Betting on war and death creates an environment in which insiders can profit off of nonpublic information, our national security is jeopardized, and violence is encouraged.
The bill arrives as prediction markets face mounting criticism over contracts tied to geopolitical conflict, political violence, and the fate of world leaders.
Under current law, the Commission has discretion to prohibit such contracts only if it determines they run contrary to the public interest.
The DEATH BETS Act would remove that discretion entirely, codifying a ban regardless of who chairs the agency.
Calling the U.S. the "crypto capital of the world," Selig said prediction markets are "now viewed by the public as more accurate than political polls" and that the agency is "no longer going to sit idly while these markets develop within our framework."
"These contracts present dangerous national security risks, including creating incentives to incite violence, foment geopolitical conflicts, and disclose classified information," the senators wrote.
Plaintiffs say the platform shortchanged winning bets by applying a “death carveout” clause that prevented the market from resolving with a full payout after his death.
Decrypt has reached out to CFTC for comment.
