Paradigm, one of crypto’s most influential venture capital firms, filed a comment letter with the Commodity Futures Trading Commission on July 27 regarding the agency’s proposed rulemaking on prediction markets. It’s the firm’s second formal submission to the CFTC on this topic in three months, signaling that the prediction market regulatory fight has become a top priority for the crypto industry’s deep-pocketed backers.

The filing responds to a Notice of Proposed Rulemaking titled “Prediction Markets; Public Interest Determinations,” which the CFTC published on June 12. The proposal seeks to define how event contracts get reviewed, approved, and traded on designated contract markets.

What the CFTC is actually proposing

The NPRM introduces a structured 90-day review process for event contracts.

The proposal also tackles definitions that matter enormously to platforms operating in this space. Specifically, it clarifies what constitutes “gaming” activity, a classification that could determine whether certain contracts are permissible under the Commodity Exchange Act or effectively banned.

Public interest factors would need to be evaluated before any event contract gets the green light.

A CFTC staff advisory from March 2026 already outlined obligations for designated contract markets around surveillance and settlement integrity. The proposed rules build on that foundation, adding more structure to what has been a largely self-certification process. Over a thousand event contracts have been self-certified by platforms during this period of rapid growth.

Why Paradigm keeps showing up

Paradigm’s previous filing came on April 30, responding to an earlier Advance Notice of Proposed Rulemaking. The fact that the firm is back less than three months later, engaging with the more detailed NPRM, suggests this isn’t a one-off lobbying effort.

The comment letter reportedly focuses on the mechanics of event contracts and their broader implications within the derivatives market rather than on any specific cryptocurrency.

Platforms like Kalshi and Polymarket have reported significant growth in trading volumes, with Kalshi citing billions in notional volume.

What this means for investors

For traders and investors already active on prediction market platforms, the proposed 90-day review process could introduce friction. New contracts would need to clear regulatory review before going live. On the flip side, a clearer regulatory framework reduces the existential risk that the CFTC could one day decide to shut down entire contract categories.

The competitive landscape among prediction market platforms could shift substantially depending on how the final rules land. Platforms that have invested in compliance infrastructure and surveillance capabilities will be better positioned to meet the CFTC’s requirements around settlement integrity and market oversight. Those that have grown quickly by self-certifying large numbers of contracts without robust compliance systems may face a harder road.

The 90-day comment period closed on July 27, the same day Paradigm submitted its letter.