Gemini Wins CFTC Approval for U.S. Prediction Markets After Five-Year Review

Regulated Event-Contract Trading Marks New Phase for the Exchange

TL;DR

• Gemini secures a CFTC Designated Contract Market license after a five-year regulatory process.
• The approval authorizes U.S. trading of binary event contracts, with crypto derivatives expansion under review.
• Gemini’s stock jumped sharply following the announcement, though still far below its IPO price.

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Gemini’s push to operate regulated prediction markets in the United States reached a decisive milestone on December 10–11, 2025, as the Commodity Futures Trading Commission approved the firm’s affiliate, Gemini Titan, LLC, as a Designated Contract Market. The license authorizes fully regulated binary event contracts for U.S. users and closes out a licensing effort that began roughly five years ago, dating back to the company’s application in early 2020. The approval gives Gemini access to a market segment long hampered by legal uncertainty and competitive pressure from lightly regulated offshore venues.

The company’s initial offering will center on yes-or-no event markets tied to measurable outcomes across financial, political, economic, and cultural domains. Gemini pointed to examples like whether Bitcoin closes the year above $200,000 or whether X (formerly Twitter) pays its €140 million EU fine by 2026, underscoring the broad range of data-driven questions eligible under CFTC guidelines. U.S. customers will access the markets through Gemini’s existing web platform using USD balances already held on the exchange, while mobile support will roll out after launch. By routing trading directly through a CFTC-supervised marketplace rather than a gray-area offshore system, Gemini is positioning the product as a regulated alternative in a sector defined by explosive activity and recurring compliance disputes.

Tyler Winklevoss characterized the decision as the final step of a multi-year licensing odyssey and framed it as a foundational pillar for Gemini’s long-term strategy. Cameron Winklevoss described prediction markets as capable of scaling to a size comparable to, or potentially larger than, traditional capital markets, reflecting a belief that outcome-based trading will evolve into a mainstream financial instrument. Both highlighted the policy shift inside Washington, pointing to Acting CFTC Chairman Caroline D. Pham’s broader pro-innovation posture and the agency’s recent industry-focused initiatives, including a CEO Innovation Council that brings together leaders from Polymarket, Kalshi, Nasdaq, CME Group, and Gemini.

Trading platforms already operating in the space—particularly Kalshi and the newly U.S.-compliant Polymarket—now face a regulated competitor with deeper exchange infrastructure. The competitive field is widening as traditional financial firms also move in: Reuters reports that Robinhood, Interactive Brokers, Intercontinental Exchange, and Fanatics have explored or expanded prediction-style products as the regulatory environment shifts. Those moves follow years of disputes over the legality of event contracts, including recent actions by Massachusetts regulators attempting to block certain sports-related markets, highlighting the tension between market demand and jurisdictional boundaries.

Gemini’s approval has implications beyond prediction markets. The company disclosed that it is exploring a broader CFTC-regulated derivatives suite for U.S. clients, including crypto futures, options, and perpetual swaps. Those instruments account for most global crypto derivatives volume but remain tightly restricted in the United States, creating a sizable gap between offshore and domestic market access. Industry analysts cited in coverage estimate that prediction-style products alone already generate billions in annualized activity, with one estimate placing the figure around $3.5 billion across categories like elections, economic indicators, sports outcomes, and cryptocurrency milestones.

Market reaction to the approval was immediate. Shares of Gemini Space Station (NASDAQ: GEMI) surged across various reporting windows: approximately 10.8%, 13.7%, 15%, 18% in pre-market trading, and at one point above 30% depending on the timing cited by different outlets. Despite the rally, the stock remains significantly below its September 2025 IPO price, with some reports noting levels more than 50% under the initial listing. The jump nevertheless reflects investor expectations that regulated event-contract trading could become a meaningful revenue driver if liquidity develops and user adoption matches early projections.

Access logistics are straightforward at launch. U.S. customers will trade through the web interface, with mobile applications arriving later. Funding uses existing USD balances, an approach intended to reduce onboarding friction. The company’s compliance posture—combined with the CFTC’s endorsement—positions Gemini to capture users who have avoided offshore markets due to legal uncertainty but remain interested in outcome-based trading.

The timing of the approval reinforces a broader recalibration in U.S. policy toward digital assets and derivatives. Under Acting Chairman Pham, the CFTC has leaned into structured industry engagement and clearer pipelines for licensed innovation, a contrast to previous administrations’ fragmented enforcement-driven approach. Gemini’s DCM license translates that shift into a regulated market entry point for a sector that has grown faster than the U.S. regulatory framework supporting it.

The exchange now heads into a competitive landscape crowded with incumbents, new entrants, and traditional financial institutions converging on the same opportunity. Whether Gemini can translate regulatory clearance into sustained liquidity and market depth will determine how quickly prediction markets become a mainstream U.S. financial product rather than a niche segment struggling under jurisdictional disputes.

This article has been refined and enhanced by ChatGPT.