What to know:
- President-elect Donald Trump is reportedly considering appointing Brian Quintenz to chair the U.S. Commodity Futures Exchange Commission (CFTC).
- Quintenze, an ex-CFTC commissioner, is head of crypto policy for a venture capital firm.
- His potential CFTC leadership could usher in a new era for prediction markets.
Brian Quintenz, currently head of crypto policy for Andreessen Horowitz’s venture capital firm a16z, has reportedly emerged as a frontrunner to lead the Commodity Futures Trading Commission under President-elect Donald Trump.
Crypto is not the only industry that would welcome Quintenz as CFTC chair. Prediction markets — platforms where users trade contracts based on the outcomes of future events — would presumably benefit, too, as Quintenz is on the board of Kalshi, the first CFTC-regulated prediction market.
“Prediction markets are the next frontier in market-pricing mechanisms that will provide new risk hedging opportunities and better inform public discourse, ” Quintenz tweeted in 2021.
Thrilled to announce I’m joining @Kalshi’s Board. Prediction markets are the next frontier in market-pricing mechanisms that will provide new risk hedging opportunities and better inform public discourse. Kalshi is a true pioneer as the 1st @cftc registered event contract venue. https://t.co/g2aUCP99d9
— Brian Quintenz (@BrianQuintenz) November 16, 2021
Quintenz previously served as a CFTC commissioner from 2017 to 2021 after receiving a nomination from President Barack Obama in 2016. During his tenure, he pushed for the approval of event contracts and crypto derivatives.
Prediction markets, a niche yet growing industry, may find their trajectory reshaped by new CFTC leadership.
A new era for prediction markets?
Up to this point, the prediction market industry has struggled with regulatory hurdles in the U.S., as the CFTC has fought efforts to offer election contracts, citing election integrity concerns. Despite these challenges, both regulated and unregulated prediction market platforms exploded ahead of the 2024 election.
Polymarket, an unregulated blockchain-based prediction market that was previously fined $1.4 million by the CFTC for regulatory violations, became a go-to source for election odds last fall and added famous statistician Nate Silver to its board.
The company generated over $3 billion in trading volume on the presidential election winner, with tens of millions coming from the notorious Polymarket “whale,” a French trader who would go on to win a whopping $85 million from Trump’s victory.
Notably, as part of its 2022 settlement, Polymarket agreed to block U.S.-based customers. However, the platform’s weak Know Your Customer processes were reportedly easy to circumvent with a VPN, presumably setting the stage for the FBI raid on Polymarket CEO Shayne Coplan’s New York apartment one week after Election Day.
Meanwhile, Kalshi waged a legal battle with the CFTC over its ability to offer election contracts. Following a federal appeals court decision to lift the regulator’s stay, Kalshi launched its first election markets on Oct. 4, 2024.
Despite arriving late to the election betting party, Kalshi eclipsed in $500 million trading volume on the presidential election winner, with additional millions traded across its Senate, congressional, and popular vote markets.
Following the election, both companies touted the prescience of their markets, noting that they correctly positioned Trump as the favorite before Election Day.
As for their ongoing battles with the government, lawyers for Kalshi and the CFTC will meet in court for oral argument next month, and little has been revealed about the Department of Justice’s probe into Polymarket. Coplan and Polymarket appear unfazed as the incoming administration considers crypto-friendly officials, such as Paul Atkins for SEC chair, to lead a new regulatory regime.
In any case, Quintenz’s potential appointment to the chair of the CFTC could herald a new era for prediction markets, marking a sharp pivot from the grim future some predicted for the industry last October.
What others are saying
Brian Quintenz would be an amazing pick for CFTC https://t.co/CiYdFZHedV
— Brian Armstrong (@brian_armstrong) December 12, 2024
Just in: a16z head of policy Brian Quintenz rumored to be Trump's top pick for CFTC chair
— L0la L33tz (@L0laL33tz) December 12, 2024
Meanwhile, a16z is already dreaming up all the ways it can surveil your bank accounts: pic.twitter.com/f2H1UqlaS7
