Woofun AI reports that HPC and Multicoin Capital have jointly endorsed the CFTC’s proposed framework for prediction markets, aiming to replace fragmented state gambling laws with clear federal standards. This intervention addresses the regulatory vacuum created by aggressive state-level enforcement actions against event-based contracts.

The urgency stems from rapid market expansion, exemplified by Hyperliquid, which saw open interest reach all-time highs since its May launch.

Meanwhile, state regulators continue to classify these instruments as gambling products, challenging the Commission’s authority in court and stretching existing statutes beyond their intended scope. This friction highlights the inadequacy of a fifty-state regime in managing modern financial innovation.

Structurally, the CFTC’s proposal relies on statutory authority granted by Congress in 2010 to prevent such fragmentation. The agency issued an advance notice seeking input on how to govern event contracts involving listed activities like war or gaming. Under current law, the Commission can block contracts deemed contrary to the public interest, but the new framework seeks to clarify how this power is applied.

Per Woofun AI, the firms recommend specific refinements to strengthen this oversight, including a settlement-based reading of "involve" and detailed examples for edge cases. They argue that publishing reasoning for both blocked and allowed contracts is essential for transparency. These measures aim to establish technology-neutral federal rules that distinguish exchange-traded contracts from traditional gambling wagers.

This alignment mirrors principles long advocated across onchain derivatives, where advance standards and published reasoning are critical. By insisting on one federal regulator, the industry seeks to eliminate the uncertainty that hinders investment. This marks a pivotal step toward a unified national framework for prediction markets.