Commodity Futures Trading Commission Chairman Mike Selig stated that the agency will persist in defending its exclusive right to regulate prediction markets in court, emphasizing that any valid product offered within a CFTC-regulated exchange falls under federal oversight, irrespective of the subject matter. Selig's remarks were made on the sidelines of the Digital Assets and Emerging Tech Policy Summit, where he underscored the CFTC's lawsuits against several states as a means to clarify its regulatory authority over commodity derivatives markets. The chairman pointed to a recent Third Circuit Court ruling as bolstering the agency's position. Under Selig's leadership, the CFTC has been actively litigating to establish that prediction markets provide derivative products under the Commodity Exchange Act, rather than gambling services that states can regulate.
He noted that the statute clearly indicates federal regulation applies when a swap is offered on a federally regulated Designated Contract Market, preempting state gambling laws. When questioned about the selective litigation, Selig hinted that other states might face similar action, citing the CFTC's involvement in a Ninth Circuit case.
The agency is also navigating the Dodd-Frank Act's provisions regarding public interest and the regulation of swaps, with Selig affirming that the CFTC's authority includes deciding what products are contrary to the public interest. Furthermore, the CFTC is engaged in a rulemaking process to clarify its oversight of prediction markets and is open to feedback. Beyond prediction markets, Selig discussed the CFTC's collaborative work with the Securities and Exchange Commission on interpretative guidance, aiming to provide clarity on digital assets and securities, and ensuring alignment between the two agencies.