Crypto.com has launched a new standalone prediction markets platform, OG, just ahead of the Super Bowl, providing federally regulated sports event contracts through its derivatives affiliate, Crypto.com | Derivatives North America (CDNA). This significant move comes at a time when the exchange, along with several competitors, is facing legal scrutiny from state regulators, who allege unlicensed sports betting operations.
The OG platform aims to offer a variety of contracts that are regulated by the Commodity Futures Trading Commission (CFTC), covering not only sports events but also financial, political, cultural, and entertainment markets. According to Kris Marszalek, co-founder and CEO of Crypto.com, the company has experienced a remarkable 40-fold growth in its prediction market business over the past six months, prompting the creation of a dedicated platform.
Nick Lundgren, appointed as OG’s CEO and also serving as Crypto.com’s chief legal officer, highlighted that the platform is the first to offer federally licensed sports prediction contracts in the United States. By leveraging CDNA’s futures commission merchant license, OG is set to introduce margin trading capabilities. Additionally, early users of the platform can benefit from rewards, with the first one million registrants being eligible for bonuses of up to $500.
The launch of OG is particularly noteworthy against the backdrop of ongoing enforcement actions from state regulators. States such as Connecticut, Tennessee, Michigan, and Illinois have issued cease-and-desist orders against Kalshi, Polymarket, Crypto.com, and Robinhood, accusing them of operating unlicensed sports betting platforms. In Nevada, the Gaming Control Board has initiated a civil enforcement action against Coinbase Financial Markets to prevent its event contracts, while a state court has granted a temporary restraining order against Polymarket. Similar actions have been taken against Kalshi since March 2024.
In response to these developments, New York Attorney General Letitia James issued a consumer alert warning residents about the potential risks associated with prediction markets. She characterized these platforms as offering bets disguised as event contracts, lacking consumer protections. Currently, Crypto.com is appealing a decision from a Nevada federal district court that denied its preliminary injunction request to halt the enforcement of state laws against its sports event contracts.
