Law and Ledger is a news segment focusing on crypto legal news, brought to you by Kelman Law – A law firm focused on digital asset commerce.
The following opinion editorial was written by Alex Forehand and Michael Handelsman for Kelman.Law.
In the latest development for prediction markets, Polymarket has finally secured approval to relaunch in the U.S., ending a three-year hiatus that followed a 2022 CFTC settlement over unregistered derivatives trading. The clearance hinges on its $112 million acquisition of QCEX (comprising QCX LLC and QC Clearing LLC), a CFTC-licensed contract market and clearinghouse, which recently received a nod of approval from the CFTC.
On September 3, 2025, the U.S. Commodity Futures Trading Commission (CFTC) issued a targeted no-action letter (Staff Letter No. 9113-25), granting QCX LLC and QC Clearing LLC relief from swap data reporting and recordkeeping requirements for “event contracts.”
The letter stipulates that, under defined conditions, the CFTC will not recommend enforcement action against QCX LLC or QC Clearing LLC for non-compliance with certain swap-related data and recordkeeping obligations. The relief is limited to transactions executed under QCX’s rules and cleared through QC Clearing, aligning with precedent but confined to a narrow regulatory corridor.
The CFTC’s no-action letter, coupled with Polymarket’s acquisition of QCEX, sets an important regulatory precedent. Rather than attempting to win approval as a new entrant, Polymarket has effectively navigated U.S. derivatives law by acquiring an already licensed contract market and clearinghouse, then leveraging targeted regulatory relief. This pathway demonstrates that compliance hurdles in the prediction market space are not insurmountable if firms are willing to combine creative structuring with engagement from regulators.
Equally significant is what this means for the legitimacy of prediction markets themselves. Once viewed as regulatory gray-area experiments, these markets are increasingly being recognized as financial instruments in their own right.
Advocates argue that prediction markets can provide more accurate, real-time insights than traditional polling, with some even suggesting that their informational value rivals equities markets. The CFTC’s willingness to craft a compliance framework around event contracts, rather than closing the door outright, is a clear signal of this evolving acceptance.
The move also carries political undertones. Polymarket’s return coincides with the involvement of 1789 Capital, backed by Donald Trump Jr., and follows the quiet closure of prior DOJ and CFTC probes. Whether coincidence or not, the timing has prompted discussion about the extent to which political influence may accelerate or constrain innovation in the financial sector. That question is likely to become more pronounced as prediction markets intersect with elections and other politically sensitive events.
Notably, Polymarket’s re-entry intensifies competition in a U.S. market previously dominated by Kalshi. Kalshi has already established itself as a CFTC-registered designated contract market, offering event contracts including those tied to political outcomes. Polymarket’s U.S. relaunch now ensures that multiple players will operate under regulatory oversight, creating a more dynamic—and potentially more innovative—landscape for prediction markets.
The tandem of the CFTC’s no-action letter and Polymarket’s QCEX acquisition marks an inflection point for prediction markets. While not a blanket endorsement, the regulatory accommodation offers a practical pathway for such platforms to operate lawfully within U.S. derivatives frameworks.
Polymarket’s CEO, Shayne Coplan, publicly affirmed the platform’s “green light” to resume U.S. operations, while praising the CFTC for their “impressive work” and “record timing.”
For legal and financial professionals, this development illustrates how strategic structuring—and timely regulatory relief—can navigate old compliance barriers and establish new operational legitimacy. It also raises compelling questions about the future regulatory landscape for fintech, political betting markets, and crypto-linked derivatives.
Kelman PLLC continues to monitor developments in crypto regulation across jurisdictions and is available to advise clients navigating these evolving legal landscapes. For more information or to schedule a consultation, please contact us here.
This article originally appeared at Kelman.law.
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