Binance.US plans to apply for a crucial US derivatives licence that would allow it to offer regulated prediction markets to retail customers, as the crypto exchange looks to rebuild its position in the American market.
The company intends to file for a Commodity Futures Trading Commission (CFTC) designated contract market (DCM) licence in August, according to comments from Chief Executive Officer Stephen Gregory at the Rare Evo conference in Las Vegas, relayed by journalist Eleanor Terret.
If the CFTC approves the application, Binance.US would be able to list futures, options and event-based contracts under federal oversight, significantly broadening its offer beyond its current spot cryptocurrency trading business.
Gregory has already flagged derivatives, perpetual futures and prediction markets as central to the exchange’s expansion plans, describing them earlier this month as potential new revenue lines, subject to regulatory clearance.
Growing field of regulated prediction markets
A DCM licence would place Binance.US in a small but expanding group of federally supervised prediction market operators.
Kalshi and Polymarket US are already active in the space, while Gemini obtained its own CFTC licence earlier this year. Coinbase has also moved into the segment through a partnership with Kalshi that gives US users access to event contracts.
Competition is also emerging from outside the core crypto exchange sector. The Wall Street Journal reported last week that Robinhood has explored adding prediction market contracts from Crypto.com to its brokerage platform, underlining the broader financial industry’s interest in the product.
Part of Binance.US rebuild after regulatory setbacks
The decision to seek a DCM licence forms part of Binance.US’ wider recovery strategy following several years of regulatory difficulties.
Gregory said earlier this month that the company is aiming to win back roughly 20% of the US crypto exchange market – a share it previously held before regulatory challenges curtailed its business. He identified prediction markets and derivatives as areas that could help diversify income alongside moves to cut trading fees and improve liquidity.
He also said Binance.US has restored US dollar banking services across most of the states it supports and is working to entice users back by offering lower costs and deeper markets.
Prediction markets surge as trading model diversifies
Interest in event-based contracts has intensified across the sector as firms look beyond traditional crypto spot trading.
Robinhood’s latest quarterly figures illustrate the shift. The brokerage generated $156m in revenue from event contracts in the second quarter, more than 10 times the amount reported a year earlier.
Customers traded over 13.6 billion event contracts in that period, making the product Robinhood’s fastest-growing source of transaction-based revenue, according to its earnings release.
While the company’s cryptocurrency transaction revenue dropped 38% year-on-year, event contracts, options and equities supported a rise in overall quarterly revenue to a record $1.31bn.
State-federal clash over legal status
Even with a federal licence, Binance.US and other operators would still have to navigate a patchwork of state gambling rules that increasingly collide with CFTC oversight.
Several states argue that sports-related event contracts are effectively gambling and fall under their own laws, regardless of federal commodities regulation.
Tensions escalated this week when a federal judge in Wisconsin refused a CFTC request to stop the state enforcing its gambling laws against platforms including Kalshi, Polymarket, Crypto.com, Robinhood and Coinbase.
Judge William Griesbach ruled that the CFTC had not shown that sports event contracts qualify as swaps under the Commodity Exchange Act for the purpose of obtaining a preliminary injunction. He also concluded that Wisconsin’s gambling statutes are not pre-empted by federal commodities rules, allowing the state to continue enforcement while the case progresses. The CFTC has said it will appeal.
Elsewhere, courts have reached conflicting positions. Minnesota has temporarily blocked enforcement of its prediction market ban, while courts in New York, Michigan and Washington have issued decisions favouring state regulators in separate disputes. The lack of uniformity has left operators without a clear nationwide standard.
CFTC weighs tighter rules on sensitive contracts
At federal level, the CFTC is still examining proposed changes to Rule 40.11, which would create a formal framework for assessing event contracts linked to gaming, war, terrorism, assassination and unlawful activity.
The consultation has drawn submissions from exchanges, legal specialists, sports bodies and state authorities. Earlier this week, attorneys general from 44 states urged the Commission to withdraw and rewrite the proposal, arguing that it exceeds the powers granted by the Commodity Exchange Act and intrudes into an area traditionally managed by states.
The National Football League has called for stricter controls on sports prediction markets, including tougher integrity measures and longer review periods before new contracts take effect. In contrast, the National Hockey League and Major League Baseball have struck commercial deals with prediction market platforms.
Separately, the CFTC’s Division of Market Oversight has reminded designated contract markets that new event contracts must be filed with detailed, contract-specific legal analysis and settlement terms, rather than through broad template certifications.
For Binance.US, any eventual DCM approval would offer a regulated route into a fast-growing but legally contested corner of the US trading landscape, as the exchange seeks to restore its standing in the country’s crypto market.
