Alpaca, a technology company that provides developer-first APIs for brokers, was approved to operate prediction markets by the Commodity Futures Trading Commission (CFTC).
Alpaca’s subsidiary, Alpaca Derivatives LLC, registered as a futures commission merchant (FCM) and is a Member of the National Futures Association (NFA).
Key Takeaways
- Alpaca provides agent-first brokerage infrastructure to companies in finance.
- Without a DCM license, Alpaca can’t fully execute trades internally.
- Entering prediction markets will allow companies using Alpaca’s technology to expand their product offerings.
Receiving FCM and NFA approval means that Alpaca is now able to broker and clear prediction market and event contract trading. It cannot list markets in-house without receiving its Designated Contract Market status and will need to use an intermediary, such as Kalshi or CME Group.
Alpaca did not reveal its exact intentions with its new licensing, although it said that it will slowly introduce new products to its customers.
“This milestone broadens Alpaca’s regulated brokerage capabilities and enables the company to offer access to event contracts traded on prediction markets,” a statement released by the company said. “Over time, Alpaca plans to introduce a broader range of futures products, subject to regulatory approval.”
Alpaca’s clients include brokerage firms, software developers, and other financial companies.
Tony Lee, Chief Brokerage Officer at Alpaca, noted that adding event contracts to the company’s platform would allow its partners to enhance and expand their offerings through Alpaca-made infrastructure that is already in place.
“As financial markets become more connected and programmable, financial companies need regulated infrastructure that makes it easier to bring new products to market,” said Yoshi Yokokawa, Co-Founder and CEO of Alpaca. “This milestone expands the range of markets Alpaca can support and strengthens our ability to power the next generation of API-driven and AI-native financial services.”
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Big business in prediction markets
Prediction markets allow customers to trade outcomes in industries including sports, politics, weather, pop culture, entertainment, and, crucially for Alpaca, finance.
Platforms offering these markets have dominated headlines for the past year. Top operators Kalshi, Polymarket and Polymarket US generated a $50.6 billion combined notional trading volume in July, while prediction operators were responsible for 27% of the total sports betting and trading volume during the 2026 FIFA World Cup.
Pew Research Center also estimated that total cash market volumes will reach $240 billion in 2026 and $1 trillion by 2030.
Alpaca currently serves more than 10 million accounts in over 40 countries. It has raised at least $435 million, including $135 million in equity financing that was confirmed in July, which came six months after it received $150 million in Series D funding at a $1.2 billion valuation.
The debates continue
Prediction market news has largely been dominated by the surge in new competitors and ongoing legal squabbles between state and federal regulators.
Although prediction markets’ massive size and popularity, which is only growing with time, are unlikely to decline, operators were dealt a series of blows in recent weeks. Connecticut, New York, Washington, Wisconsin and Utah all recently ruled against platforms by denying them preliminary injunctions or ordering them to shut down.
