Crypto.com’s In-House Market Making for Sports Bets Sparks Controversy

Crypto.com is hiring a quant trader and internal market-making team for its sports prediction markets, sparking debate over fairness, transparency, and regulatory scrutiny as the company trades directly against customers.

Crypto.com is hiring a quant trader and building an internal market-making team to provide liquidity for its in-house sports prediction markets, a move that has sparked debate over fairness and transparency. The new hires will trade directly against customers, buying and selling contracts tied to sports event outcomes, and are tasked with maximizing profits while managing risk. Critics argue that this practice blurs the line between neutral exchange and sportsbook, raising concerns about conflicts of interest and the potential for unfair advantages, such as access to proprietary data or order flow. Crypto.com maintains that its internal market makers do not have preferential information and that the activity is not a profit center, but is intended to ensure smooth market operations. The company also notes that market makers may receive a three-second head start on sports contracts, a practice it says is fully disclosed and compliant with CFTC regulations. The move comes as the industry faces increased regulatory scrutiny, with some states ordering a halt to sports event contracts, and as competition intensifies among platforms like Polymarket and Kalshi.