One week after the murder of UnitedHealth Group Inc. executive Brian Thompson, some people were able to bet on the fate of his alleged killer. However, the Coversed exchange, a New York-based exchange, was forced to halt trading on these contracts after receiving notice from regulators, citing that they were against the public interest.
The Commodity Futures Trading Commission (CFTC) has a ban on futures trading linked to crimes, including assassination, terrorism, and war. Critics argue that events contracts are pushing futures trading beyond actual risk hedging or other legitimate economic purposes, with events like murder being used as betting fodder.
Despite the CFTC’s efforts to block election-themed contracts earlier this year, they were allowed to be traded on regulated exchanges. Some exchanges, like Polymarket, a crypto-only exchange, still allow trading on contracts related to the murder of Brian Thompson.
The CFTC has faced criticism from some for its handling of these events, with some arguing that they are more like gambling than actual risk management. The agency is set to decide on the authority to stop these contracts permanently.
The debate surrounding events contracts has teed up a second round of debate on the issue, with some arguing that the CFTC is too lenient and others claiming that the agency is overstepping its bounds. The situation has raised questions about the regulatory environment for events contracts, including whether the CFTC should be more proactive in blocking certain contracts.
The issue is not new, with a UK bookmaker offering bets on the outcome of O.J. Simpson’s murder trial almost 30 years ago. Despite the controversy, some companies, like Robinhood Markets Inc. and Interactive Brokers Group Inc.’s ForecastEx, have launched election-themed trading earlier this year.
