Commodity Futures Trading Commission Chairman Mike Selig emphasized that his agency will continue to assert its 'exclusive regulatory authority' over prediction markets in court, stressing that any product offered within a CFTC-regulated exchange falls under federal oversight, regardless of the subject matter. Speaking at the Digital Assets and Emerging Tech Policy Summit, Selig stated that the CFTC's lawsuits against several states aim to clarify its jurisdiction over commodity derivatives markets. He pointed to a recent Third Circuit Court ruling as bolstering the agency's position.
The CFTC is engaged in a broad litigation effort to establish that prediction markets provide derivatives products under the Commodity Exchange Act, rather than being subject to state gambling laws. Selig noted that the agency's authority is clear when it comes to swaps offered on federally regulated exchanges, and that states cannot override federal regulation with their own gambling laws. The CFTC is currently undergoing a formal rulemaking process to clarify its oversight of prediction markets and is open to suggestions on how to evaluate this process. Additionally, the agency is reviewing comments on its recent interpretative guidance with the Securities and Exchange Commission, which aims to provide clarity on the distinction between commodities and securities in the context of digital assets.