In an interview with CoinDesk, Commodity Futures Trading Commission Chairman Mike Selig reaffirmed the agency's commitment to defending its 'exclusive regulatory authority' over prediction markets in court, stating that any product offered within a CFTC-regulated exchange falls under their jurisdiction, regardless of the subject matter. The CFTC's lawsuits against several states aim to establish its authority over commodity derivatives markets, with Selig citing a recent Third Circuit Court ruling in support of the agency's position.
The agency is also engaged in a major litigation effort to assert that prediction markets provide derivatives products under the Commodity Exchange Act, rather than gambling services regulated by states. Selig emphasized that the statute clearly indicates federal regulation applies when a swap is offered on a federally regulated Designated Contract Market, and that states cannot override federal oversight 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 this process.