The Commodity Futures Trading Commission will persist in defending its exclusive right to regulate prediction markets, according to Chairman Mike Selig. In an interview with CoinDesk, Selig emphasized that the agency's regulatory authority applies to all valid products offered within CFTC-regulated exchanges, irrespective of the subject matter.
The CFTC is currently engaged in lawsuits against several states, including Arizona, Illinois, and Connecticut, to establish its authority over prediction markets. Selig's remarks come after a recent Third Circuit Court ruling that supported the CFTC's oversight of prediction markets. The agency is also undertaking a major litigation effort to establish that prediction markets provide derivatives products under the Commodity Exchange Act, rather than gambling services regulated by states.
Selig noted that the CFTC's view is clear: when a swap is offered on a federally regulated Designated Contract Market, the transaction is subject to federal regulation, regardless of the underlying event. The agency is open to suggestions on its oversight of prediction markets and is currently undergoing a formal rulemaking process to clarify its regulatory authority.