US Regulatory Body Takes Wisconsin to Court Over Prediction Markets

The US Commodity Futures Trading Commission has added Wisconsin to its list of defendants in a lawsuit, as part of its efforts to assert jurisdiction over prediction markets. This move is the latest in a series of legal actions taken by the agency against states that have attempted to regulate or ban these markets. Wisconsin recently filed a lawsuit against several companies, including Kalshi and Crypto.com, alleging that they were operating unlicensed gambling operations within the state. However, the CFTC Chairman, Mike Selig, has argued that the agency has exclusive jurisdiction over the trading of event contracts, which are a type of derivative. The CFTC has filed a lawsuit in response, seeking to block Wisconsin's enforcement actions and assert its authority over the markets. This is not an isolated incident, as the CFTC has also sued other states, including New York, Arizona, and Illinois, over similar issues. The agency's actions have been seen as a clear signal that it will not tolerate state-level interference with its regulation of financial markets. According to Ryan VanGrack, Coinbase's vice president of legal, the CFTC's lawsuits mark a significant shift in the regulatory landscape, ending the era of jurisdictional ambiguity and establishing a clear line of authority.