The new CFTC chair, Mike Selig, has announced a review and modernization of financial market regulation, including embracing prediction markets.
The new Chairman of the U.S. Commodity Futures Trading Commission (CFTC) has outlined a sweeping change in regulatory posture this week. CFTC Chairman Mike Selig committed the agency to a formal rulemaking campaign focused on financial technology, digital assets, and emerging markets, including prediction platforms.
Key Takeaways
* CFTC Chair Mike Selig said the agency would pursue formal rulemaking to create lasting oversight for crypto and financial innovation.
* He argued that tailored rules would encourage new market entrants while ending regulation by enforcement.
* Prediction markets and other novel products were highlighted as areas likely to face clearer regulatory frameworks.
The approach was framed to future-proof oversight. Selig asserted that it emphasizes durable regulations over informal guidance and positions the CFTC as a central regulator for crypto-related activity under the administration of President Donald Trump.
In a series of posts on X and an opinion piece published in the Washington Post, Selig said the agency would announce additional policy changes and form an Innovation Advisory Committee to guide its work.
He described the digital asset sector as having grown into a $3 trillion market. He added that the CFTC would seek to ensure new markets develop domestically under customized rules rather than being pushed offshore.
Selig also pointed to prediction markets and perpetual futures as examples of innovation that require regulatory clarity, framing them as part of a broader modernization of legacy financial systems through technologies such as blockchain. While he did not directly address ongoing congressional efforts to pass comprehensive crypto legislation, he stressed that formal rulemaking would be difficult for future administrations to undo.
The CFTC also disclosed that Selig has hired crypto attorney Michael Passalacqua to assist with the initiative. Passalacqua previously worked at crypto exchange CrossTower and later advised digital asset clients at major law firms.
Selig’s agenda builds on initiatives launched under former Acting Chairman Caroline Pham, who emphasized crypto policy and coordination with the Securities and Exchange Commission before leaving the agency last month.
Gaming industry presses Congress over prediction markets
As the CFTC moves toward a more permissive, structured approach to financial innovation, the expansion of prediction markets has sparked sharp resistance from the gaming industry.
The American Gaming Association and the Indian Gaming Association have urged Congress to intervene, arguing that certain sports-event contracts offered through CFTC-regulated platforms amount to unlicensed sports betting.
In a joint letter dated Jan. 12, the groups said these products are indistinguishable from legal sports wagering and are undermining state gaming laws and tribal sovereignty due to what they view as regulatory inaction. They called on lawmakers to use upcoming legislation on the cryptocurrency market structure to prohibit sports-event contracts that explicitly resemble gambling.
The groups warned that the rapid growth of these markets conflicts with existing federal law designed to protect consumers and maintain market integrity. They also argued that the CFTC’s self-certification process allows platforms to launch new contracts unless the agency steps in, creating a loophole for products tied to sporting outcomes.
During his confirmation hearing, Selig told lawmakers the CFTC would not block the contracts while court challenges continue. However, he added that the agency would ultimately follow any direction Congress provides.
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