Jonathan Gould (pictured above) was officially sworn in as the new Comptroller of the Currency on Tuesday, providing yet another pro-crypto ally in U.S. financial regulation.
Gould was the former chief legal officer for Bitfury, a security and infrastructure company for Bitcoin. He is now tasked with chartering and regulating national banks and federal savings associations in his role as head of the US Office of the Comptroller of the Currency (OCC) for a five-year term.
Gould joins to a growing roster of crypto-friendly federal regulators that also bolsters the outlook for prediction markets.
Prediction markets and crypto go hand in hand
Even though they’re separate industries, crypto and prediction markets are linked together by similar ideological bedfellows.
One of the popular applications of cryptocurrencies is funding accounts on prediction market exchanges. Platforms like Polymarket are large and well-known, but smaller ones like BET Drift on the Solana blockchain are much more niche. But similar crypto projects are plentiful. One database shared on X shows a large uptick in crypto prediction markets from 2021 on.
The most enthusiastic supporters of crypto and prediction markets believe they can build new institutions free from old corrupting influences. Cryptocurrencies are founded on an attempt to shift control from centralized entities like banks to a distributed network of participants. Similarly, prediction markets aggregate opinions without pollsters, pundits, or news outlets.
Crypto and prediction market momentum on the regulator front
It’s no coincidence that former Kalshi board member Brian Quintenz was tapped to chair the Commodity Futures Trading Commission (CFTC) as Congress prepares to add crypto regulation to the CFTC’s regulatory responsibilities.
Crypto investors spent over $200 million on President Trump’s memecoin, an investment that helped secure the industry’s political influence. Trump has not only embraced crypto and NFTs. He also continues to appoint people who will support the crypto agenda, like Gould, SEC Chairman Paul Adkins, Treasury Secretary Scott Bessent, and “White House AI and Crypto Czar” David Sacks.
Each of these officials is intent on growing a regulated crypto industry, which could lead to at least some crypto prediction markets becoming licensed by the CFTC. Existing CFTC-regulated prediction markets, like Kalshi, could also expand their crypto deposit and withdrawal options in the wake of upcoming crypto regulation.
As crypto is set to expand, it will help lift the prediction market industry with it, even as state gaming regulators and attorneys general are attempting to limit the events that prediction market exchanges can offer contracts on.
States still fighting prediction market expansion
These favorable federal appointments come during a period of state hostility to event contracts’ expansion into sports. Kalshi has sued three of the states that sent the company cease and desist letters, spurring cases that are ongoing.
Kalshi was granted preliminary injunctions in Nevada and New Jersey but faces a tougher battle in Maryland, where the judge requested supplemental briefing and didn’t immediately agree with Kalshi’s federal preemption argument. The Maryland judge’s decision will be an important crossroads for prediction market platforms interested in offering sports and for states attempting to protect their state-regulated sports betting industries.
A panel at the National Council of Legislators from Gaming States (NCLGS) summer meeting covered prediction markets. One of the overarching lessons was that sports contracts’ legality will likely be decided at the federal level rather than the state level.
Unless state gaming regulators secure a legal victory against federal sports event contracts, the roster of Kalshi-sympathetic federal regulators will make that decision instead.
