CFTC Signals New Rulebook For Prediction Markets Like Polymarket And Kalshi
The US derivatives watchdog is making ready a brand new rulebook for prediction markets, as platforms akin to Polymarket and Kalshi pull in billions in exercise by letting merchants wager sure or no on all the things from politics to popular culture.
In his first public remarks as chairman of the Commodity Futures Trading Commission on Thursday, Michael Selig stated the company will transfer towards clearer requirements for occasion contracts, a class the CFTC has overseen for greater than twenty years.
“It is time for clear guidelines and a transparent understanding that the CFTC helps lawful innovation in these markets,” Selig stated in ready remarks. “Consistent with my dedication to fostering accountable innovation in crypto asset markets, I’ll proceed to assist the accountable improvement of occasion contract markets.”
Polymarket Emerges As A Liquidity Hub For Politics And Real-Time Events
Prediction markets have surged in visibility as crypto-native venues and controlled US companies compete for merchants looking for round the clock publicity to headlines.
Polymarket, specifically, has constructed deep liquidity in politics and present occasions, with some markets drawing tens to tons of of hundreds of thousands in quantity.
Selig framed his broader agenda as a push for regulatory readability and inter-agency coordination, positioning the CFTC as a forward-looking regulator that may adapt guidelines with out freezing innovation.
He additionally used the speech to set a pro-innovation tone for crypto market oversight, calling the second a generational alternative to modernize how the US regulates digital finance.
“Today marks the start of a brand new chapter for the CFTC,” he stated, including the company will sharpen its deal with “regulatory readability, inter-agency coordination, and permissionless innovation.”
Event Contracts Move Closer To A Formal Rulebook
He stated he’s partnering with the Securities and Exchange Commission on Project Crypto, an effort he described as a method to deliver coherence to federal oversight by clarifying jurisdictional strains, lowering fragmentation, and growing a clearer taxonomy for crypto belongings.
“And because of the management of President Trump, “Operation Chokepoint 2.0” is historical past, regulation by enforcement is useless, the GENIUS Act is regulation, Congress is on the cusp of passing market construction laws, and the U.S. is now the crypto capital of the world,” Selig stated.
On prediction markets particularly, he laid out instant steps earlier than the bigger rewrite. He stated he has directed workers to withdraw the 2024 occasion contracts rule proposal that will prohibit political and sports-related occasion contracts, together with a 2025 workers advisory that cautioned registrants about providing sports-related occasion contracts amid litigation.
“Second, wanting forward, and within the spirit of markets that commerce on expectations, I’ve directed CFTC workers to maneuver ahead with drafting an occasion contracts rulemaking,” he stated, arguing the present framework has confirmed tough to use and has left market members working with too little certainty.
He additionally stated the company will reassess its participation in pending courtroom issues and work with the SEC on a joint interpretation tied to Title VII definitions, aiming to attract clearer strains between commodity and safety choices, CFTC-regulated swaps, and SEC-regulated security-based swaps.
The strikes land as exercise rises at the same time as some state gaming regulators push again on the unfold of event-based buying and selling. For the CFTC, Selig’s message was that prediction markets are now not area of interest merchandise, and the subsequent part will hinge on whether or not Washington can ship guidelines that maintain these contracts onshore, lawful, and simpler to navigate.
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