Kamala Harris’ odds of winning the 2024 U.S. presidential election have surpassed those of Donald Trump on Polymarket. Meanwhile, the U.S. Commodity Futures Trading Commission (CFTC) is facing backlash from the crypto industry over a proposed rule to ban political prediction markets like Polymarket. Additionally, recent Federal Reserve actions against crypto-friendly banks have created doubts about Harris’ true stance on crypto, while the IRS has updated its digital asset tax reporting form for 2026.
Harris Takes Lead Over Trump
Over the weekend, U.S. Vice President Kamala Harris saw her odds of winning the upcoming presidential election surpass those of Donald Trump on Polymarket. Harris’ chances of securing the presidency climbed to 52%, while Trump’s odds dropped to 45%, which is a big decline from 70% in mid-July. The shift happened on Saturday, and was a pivotal moment in the race.
2024 Election Forecast (Source: Polymarket)
The U.S. election results have become the biggest prediction market on Polymarket, with its volume exceeding $572 million. As cryptocurrency has started to play a bigger and bigger role in the election, Harris’ team has started reaching out to the crypto industry. Trump has recently also continuously reiterated his support for Bitcoin.
While Harris and her running mate, Tim Walz, still have to address cryptocurrency publicly, Walz’s tenure as governor of Minnesota saw the enactment of legislation to strengthen regulation of cryptocurrency kiosks. Grassroots organization Crypto4Harris is also gaining momentum, with plans to host a town hall featuring people like Crypto Council for Innovation CEO Sheila Warren and billionaire Mark Cuban.
Meanwhile, Trump recently voiced his opinion that the U.S. should focus on building cryptocurrency rather than selling it, and warned that other countries like China are already advancing in this industry. Adding to the political drama, Elon Musk is scheduled to have a live conversation with Trump on X.
Crypto Leaders Oppose U.S. Ban on Prediction Markets
A proposed rule change by the U.S. Commodity Futures Trading Commission (CFTC) that could potentially ban political prediction markets in the United States has attracted a lot of opposition from leaders across the crypto and fintech industries. Some well known companies like Gemini, Crypto.com, Robinhood, and influential blogger Scott Alexander have shared their concerns about the rule, which seeks to clarify that prohibited ”event contracts” include staking or risking something of value on the outcome of political contests, awards contests, or athletic games.
This new rule is supported by Senator Elizabeth Warren as well as other Democrats, and aims to prevent these contracts from being traded by CFTC-registered entities. The lawmakers argue that as the 2024 election approaches, the political environment is already riddled with challenges, including dark money in campaigns, the threat of violence, and foreign interference. They believe that allowing bets on election outcomes could further destabilize the political system.
However, people and companies in the crypto industry have pushed back against the proposal. Cameron Winklevoss, a co-founder of Gemini, urged the CFTC to reconsider its stance, and suggested that the agency should work with industry stakeholders to build trust rather than deny Americans access to prediction markets. Steve Humenik, SVP at Crypto.com, also criticized the CFTC for potentially overstepping its authority.
Dragonfly Capital’s associate general counsel, Jessica Furr and Bryan Edelman, argued that the CFTC may not have the jurisdiction to regulate election event contracts and that such a determination should be made by the courts. This sentiment was echoed by other opponents, including Robinhood and the founder of ElectionBettingOdds.com.
Fed Action Fuels Doubts About Harris’ Crypto Stance
The recent enforcement action by the United States Federal Reserve against crypto-friendly Customers Bank has caused a lot of speculation about Vice President Kamala Harris’ commitment to actually mending relationships with the cryptocurrency industry. On Aug. 9, Tyler Winklevoss, co-founder of Gemini, took to X to share details about the Fed’s actions, and suggested that ”Operation Choke Point 2.0” is still active and that the Harris campaign’s crypto reset is insincere.
Screenshot of Tyler Winklevoss’ x post (Source: X)
The Fed’s 13-page enforcement action requires Customers Bank to provide a 30-day advance notice before entering any new banking relationship with a crypto company. According to Winklevoss, this could have major consequences, as Customers Bank is one of the few remaining crypto-friendly banks in the U.S. He also criticized the Federal Reserve for centralizing decision-making power over which crypto companies can access banking services, and argued that decisions like these should be made independently by each bank.
Charles Hoskinson, the founder of Cardano, fully agrees with Winklevoss’ concerns, and recently stated that the current U.S. administration, led by President Joe Biden, is hostile toward the crypto industry. He warned that electing Harris could further harm the U.S. crypto sector, and even implied that her administration will continue what he perceives as a ”war on crypto.”
In July, a group of U.S. lawmakers and congressional candidates sent a letter to Democratic National Committee Chair Jaime Harrison, urging the party to adopt a more progressive stance on digital assets and blockchain technology. This happened during a challenging period for the U.S. banking sector, which saw the collapse of several banks that served crypto businesses, including Silvergate Bank, Signature Bank, and Silicon Valley Bank, between March and August of 2023.
IRS Updates Crypto Tax Form for 2026 Reporting
Meanwhile, the United States Internal Revenue Service (IRS) updated its draft form for reporting digital asset transactions, and it is set to be implemented in 2026. On Aug. 8, the IRS released a draft of Form 1099-DA, titled ”Digital Asset Proceeds From Broker Transactions,” which will allow U.S. taxpayers to report crypto transactions from 2025, with the filing deadline in April of 2026.
The latest version of the draft form was compared to the one released in April, and included several changes. It removed the requirement for taxpayers to identify the ”broker type” for digital asset transactions, eliminated the need to report the precise time of day for transactions, and omitted spaces for wallet addresses and transaction IDs.
IRS Commissioner Danny Werfel stated that the updated form was created to provide more clarity for taxpayers and serve as a tool to help them accurately report their digital asset transactions.
Drew Hinkes, an attorney with K&L Gates, praised the revised form on X, and described it as ”massively improved,” ”less burdensome,” and requiring ”considerably less” data reporting. Ji Kim, chief legal and policy officer for the Crypto Council for Innovation, agrees with this, and pointed out that the changes were in line with what the industry advocated for.
The IRS has invited comments on the draft form in the next 30 days. The previous April version faced some criticism from the industry for being overly strict, particularly in its requirements to report transaction times and a wide range of activities.
In June, the IRS finalized its crypto broker reporting requirements, clarifying that decentralized exchanges and self-custody wallets would not be subject to these rules. According to Werfel, these requirements are part of the IRS’s plans to close the tax gap by preventing filers from hiding taxable income.
This article was originally Posted on Coinpaper.com
