BitGo, a digital asset custody and trading platform, is collaborating with Susquehanna Crypto to provide institutional clients with over-the-counter access to prediction markets. This new service will allow hedge funds and family offices to trade event-based contracts using cryptocurrency or stablecoins held in custody, with minimum trades starting at $100,000. The partnership aims to fill infrastructure gaps that have limited institutional participation in these markets.
**BitGo** and **Susquehanna Crypto** are launching a first-of-its-kind institutional OTC service for prediction markets. According to the announcement, trades will be routed through BitGo’s platform with liquidity provided by Susquehanna, enabling large investors to execute bilateral trades without moving assets off platform.
Institutional clients can trade contracts tied to real-world event outcomes using Bitcoin or stablecoin collateral. Positions are documented using derivatives-style agreements, and the platform is designed to address custody, collateral management, and execution gaps that have hindered institutional participation.
This launch coincides with growing regulatory pressure on prediction markets in the United States. At least 11 states have taken action against platforms like Kalshi, arguing they operate as unlicensed gambling venues.
In Nevada, a state court issued a temporary ban on Kalshi on March 20. This followed a federal appeals court decision to deny Kalshi’s emergency request to pause the case, siding with gaming regulators.
In Arizona, authorities filed criminal charges against entities linked to Kalshi for allegedly accepting wagers in violation of state law. Kalshi CEO Tarek Mansour called the charges a “total overstep,” arguing the platform’s activity is unrelated to gambling.
Lawmakers in Utah and Pennsylvania are moving to bring prediction markets under existing gaming frameworks. Proposed legislation includes classifying certain contracts as gambling and applying a 34% tax on revenue.
Not all state efforts have succeeded, as a federal judge in Tennessee blocked an attempt to halt Kalshi’s operations in February. The judge ruled that its event contracts fall under the Commodity Exchange Act and are subject to CFTC oversight.
Prediction markets have also faced scrutiny over potential insider trading from well-timed bets. In response, platforms like Kalshi and Polymarket introduced new restrictions to limit the use of non-public information.
At the federal level, the CFTC published an advance notice of proposed rulemaking on March 12. The notice seeks public input on how prediction market contracts should be regulated.
