Short Description
CFTC Chairman Michaеl Selig defends federal control over prediction markets against state lawsuits, escalating a major regulatory clash in the finance sector.
Read Time
2 minutes, 30 seconds
Main Article
CFTC Chairman Michaеl Selig has taken a definitive stand in an escalating battle over who regulates prediction markets in the United States. In a recent video statement and an op-ed, Selig announced the Commodity Futures Trading Commission (CFTC) filed an amicus brief to “defend its exclusive jurisdiction” over these markets, which he equates to derivative markets. This move is a direct response to what he termed an “onslaught of state-led litigation” against platforms like Polymarket, Kalshi, and Coinbase. Selig argues that prediction markets, which the CFTC has overseen for decades, are vital for allowing Americans to hedge commercial risks and act as a check on information quality.
However, this assertive federal stance faces significant pushback. A coalition of 23 U.S. Senators sent a sharply worded letter urging Selig to stop intervening in pending litigation and to align the CFTC’s actions with existing statutes. The lawmakers argue that his approach oversteps congressional intent, which left room for state and tribal gambling laws, and turns a statutory prohibition into unpredictable, case-by-case policy. This clash underscores a critical tension in U.S. financial regulation, pitting federal authority against state enforcement powers in the rapidly evolving digital asset landscape.
Amid this regulatory tug-of-war, the broader crypto industry awaits clarity from pending federal legislation. The digital asset market structure bill, which passed the House and advanced from a Senate committee, remains in limbo. Its potential passage could help resolve jurisdictional ambiguities. Meanwhile, Selig continues to champion prediction markets as socially useful tools, even as platforms find themselves caught between conflicting directives from Washington and various state capitals.
Short Summary
The CFTC, under Chairman Michaеl Selig, is asserting exclusive federal jurisdiction over prediction markets, clashing with state regulators and a group of U.S. Senators. This regulatory battle highlights the struggle to govern emerging financial technologies like event contracts and derivative markets. The outcome hinges on ongoing litigation and could be shaped by the pending digital asset market structure bill, leaving platforms in a state of uncertainty.
