CFTC staff draw a line under "mention markets"
The CFTC's Division of Market Oversight issued a staff advisory on Tuesday covering event contracts that settle on whether a named person says a particular word, shows up somewhere, or interacts with someone. Staff said there are only limited circumstances in which such contracts can be listed.
Three things worth separating.
1. The stated concern is not data quality. It is that settlement "turns on the discrete conduct of a person that may be neither independently generated nor externally verifiable." That is a test about where an outcome comes from, not about whether it can be measured afterwards.
2. The burden sits with the venue. Exchanges are expected to show a contract is not readily susceptible to manipulation, weighing oversight mechanisms, whether settlement criteria are independently verifiable, external pressure on the subject, and the subject's own outside obligations.
3. A market that can reach its own settlement event stops being a measurement of it. That is the problem oracle design has circled for years, and here it is written into listing standards by the same agency drafting crypto market-structure rules.
What to watch: whether those four factors start showing up in listing language beyond event contracts.
Not financial advice. Do your own research.
#CryptoNews #Regulation
The CFTC's Division of Market Oversight issued a staff advisory on Tuesday covering event contracts that settle on whether a named person says a particular word, shows up somewhere, or interacts with someone. Staff said there are only limited circumstances in which such contracts can be listed.
Three things worth separating.
1. The stated concern is not data quality. It is that settlement "turns on the discrete conduct of a person that may be neither independently generated nor externally verifiable." That is a test about where an outcome comes from, not about whether it can be measured afterwards.
2. The burden sits with the venue. Exchanges are expected to show a contract is not readily susceptible to manipulation, weighing oversight mechanisms, whether settlement criteria are independently verifiable, external pressure on the subject, and the subject's own outside obligations.
3. A market that can reach its own settlement event stops being a measurement of it. That is the problem oracle design has circled for years, and here it is written into listing standards by the same agency drafting crypto market-structure rules.
What to watch: whether those four factors start showing up in listing language beyond event contracts.
Not financial advice. Do your own research.
#CryptoNews #Regulation