BlockBeats News, July 5th. The European Securities and Markets Authority (ESMA) issued a statement stating that if the prediction market's "Event Contracts" meet the definition of a financial instrument, they fall under the category of Binary Options and, according to EU regulations, must not be marketed, distributed, or sold to retail investors.

ESMA stated that the legal nature of the product depends on its actual function, not on commercial names such as "Event Contracts." If the relevant contracts meet the definition of financial instruments under MiFID II, they will be considered derivatives and will be subject to the EU's Binary Options ban.

ESMA also pointed out that even if a platform only offers such products to professional investors, it still needs to be authorized under MiFID II if it provides investment services in the EU. In addition, Event Contracts may also be subject to gambling laws in individual member states; if the products are tokenized and do not qualify as financial instruments, they may fall under the Markets in Crypto-Assets Regulation (MiCA) framework.