ProphetX has become the latest company to throw its hat into the prediction markets ring, after being given the go-ahead by the derivatives regulator in the US to launch a national exchange.
The Commodity Futures Trading Commission (CFTC) has approved the startup’s dual applications – submitted last November – to register as a designated contract market (DCM) and derivatives clearing organisation (DCO).
The VC-backed firm said the approvals means it is set to become “America’s first federally regulated sports-native prediction market”.
Management added that ProphetX will allow users to directly trade, clear and settle event-based contracts.
The product includes proprietary “request for quote” parlay mechanism, which “enables users to construct and price multi-event combinations directly with counterparties”.
CEO and Co-Founder Dean Sisun said: “This approval positions ProphetX to become the first sports-native direct-clearing prediction market in the US.
“We can now expand our best-in-class sports event market offerings to millions of Americans across the country while competing on a level regulatory playing field.
“ProphetX thanks CFTC Chairman Selig for his leadership and the Commission’s staff for their work throughout the application process, and we look forward to helping shape the future of prediction markets.”
Founded by Sisun and Jake Benzaquen, ProphetX began life as Prophet Exchange, launching in New Jersey in 2022 with player liquidity ringfenced in the Garden State.
Two years later the company was rebranded to ProphetX and its business model pivoted to sweepstakes as the product was rolled out to 39 US states.
Switching to become a CFTC-regulated DCM and DCO marks the latest iteration for a business which has raised more than $20m (£15m) to date, including a $10m round involving institutional investors.
On 11 June, UK-licensed betting exchange Matchbook announced it had launched a prediction markets platform in partnership with ADI PredictStreet, an official partner of the FIFA World Cup.
Fellow exchange Smarkets, founded near 20 years ago by American Jason Trost, is also seeking CFTC approval to launch a national exchange in the US.
The CTFC announced a proposed framework for prediction markets earlier this week, giving the green light to the majority of event contracts, but closing the door on casino-style markets and any others primarily based on ‘luck’.
The post ProphetX receives CFTC approval to operate national exchange in the US first appeared on EGR Intel.
DCM and DCO applications given the thumbs up seven months after paperwork was filed with the federal derivatives regulator
The post ProphetX receives CFTC approval to operate national exchange in the US first appeared on EGR Intel.