Commodity Futures Trading Commission Chairman Mike Selig emphasized that the agency will vigorously defend its sole 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 noted that recent court rulings, including the Third Circuit Court decision, reinforce the CFTC's position.
The agency has been actively litigating to establish that prediction markets provide derivatives products under the Commodity Exchange Act, rather than gambling services regulated by states. Selig pointed out that the CFTC has the authority to regulate swaps and can block certain types based on public interest, and the lawsuits focus on the agency's exclusive regulatory authority, regardless of the events underlying the contracts.
The CFTC is currently engaged in a formal rulemaking process to clarify its oversight of prediction markets and is open to suggestions. Additionally, the agency, along with the Securities and Exchange Commission, published interpretative guidance last month, which provides a taxonomy for evaluating digital assets and ensures clarity on the distinction between commodities and securities.