key insights
- Binance.US is expanding beyond spot trading to pursue regulated derivatives and event contracts.
- Prediction markets have become one of the fastest-growing financial trading categories.
- State-level legal challenges remain the biggest obstacle despite ongoing federal oversight.
Binance.US plans to expand beyond cryptocurrency spot trading by seeking a federal license that would allow it to launch regulated prediction markets in the United States. The move could reshape the exchange’s business strategy as competition intensifies and regulators continue debating the legal status of event-based contracts.
The exchange confirmed that it intends to apply for a Designated Contract Market license with the Commodity Futures Trading Commission in August. Chief Executive Officer Steve Gregory announced the plan during the Rare Evo blockchain conference in Las Vegas, according to journalist Eleanor Terrett. If regulators approve the application, Binance.US could offer futures, options and event contracts under direct CFTC oversight.
Expansion strategy reaches the next stage
The planned application advances a strategy Gregory outlined earlier this month. At that time, he said the exchange wanted to expand into derivatives, perpetual futures and prediction markets while rebuilding its position in the US crypto market.
A Designated Contract Market license would allow Binance.US to compete in a rapidly expanding segment that extends beyond digital asset trading. Under CFTC rules, licensed exchanges may list futures and options tied to approved commodities, indexes and event outcomes, provided they satisfy regulatory standards covering governance, market surveillance and operational safeguards.
The exchange has not yet filed the application. CFTC records also showed no pending submission as of Wednesday. Even so, the announcement signals that Binance.US wants to diversify revenue after several years of regulatory setbacks that reduced its domestic market share.
Gregory has previously said the company aims to recover the roughly 20% share of the US crypto exchange market it once controlled. Alongside lower trading fees and stronger liquidity, prediction markets represent another potential growth driver if regulators grant approval.
Key developments:
- Binance.US expects to submit its CFTC license application in August.
- The proposed platform would offer regulated prediction market contracts to retail users.
- The expansion forms part of the exchange’s broader derivatives strategy.
Competition accelerates across financial markets
Prediction markets continue attracting both crypto exchanges and traditional financial platforms. Kalshi, Polymarket US and Gemini already operate within the sector under varying regulatory structures. Coinbase also entered the market through its partnership with Kalshi, giving US users access to event contracts.
Meanwhile, competition has spread beyond crypto-native companies. The Wall Street Journal recently reported that Robinhood discussed adding prediction market contracts supplied by Crypto.com to its brokerage platform.
Robinhood’s latest quarterly results illustrate the sector’s momentum. The brokerage generated $156 million in event contract revenue during the second quarter, more than ten times the level reported a year earlier. Customers traded over 13.6 billion event contracts, making the business its fastest-growing source of transaction revenue despite weaker cryptocurrency trading activity.
Company Latest prediction market development
Binance.US Plans CFTC Designated Contract Market application
Kalshi Continues operating federally regulated event contracts
Coinbase Offers event contracts through Kalshi partnership
Gemini Secured a CFTC license earlier this year
Robinhood Reported $156 million event contract revenue in Q2
Regulatory disputes continue despite federal oversight
Federal approval would not eliminate every legal challenge facing Binance.US or other prediction market operators. Several states continue arguing that sports-related event contracts violate state gambling laws even when exchanges operate under federal commodities regulations.
The legal conflict intensified after a federal judge in Wisconsin denied the CFTC’s request to block state enforcement against platforms including Kalshi, Polymarket, Crypto.com, Robinhood and Coinbase. Judge William Griesbach ruled that the agency failed to demonstrate that sports event contracts qualified as swaps under the Commodity Exchange Act for purposes of obtaining preliminary relief.
Other courts have reached different conclusions. Minnesota temporarily blocked enforcement of its restrictions, while courts in New York, Michigan and Washington issued decisions supporting state enforcement. As a result, operators continue facing inconsistent legal standards across the country.
At the same time, the CFTC continues reviewing proposed amendments to Rule 40.11, which would establish a formal review process for event contracts involving gaming, war, terrorism, assassination and unlawful activities. Attorneys general from 44 states have urged the agency to withdraw and rewrite the proposal, arguing that it exceeds federal authority. Professional sports leagues also remain divided, with the National Football League seeking tighter safeguards while Major League Baseball and the National Hockey League have formed commercial partnerships with prediction market operators.
