The Commodity Futures Trading Commission has moved to defend its exclusive federal oversight of prediction markets by filing a legal brief. CFTC Chair Mike Selig linked this action to a broader reset in U.S. crypto policy, arguing these markets are derivatives contracts under commodities law and not state gambling. This sets up a legal confrontation to prevent a fragmented state-by-state regulatory patchwork.
The Commodity Futures Trading Commission [CFTC] moved to defend federal oversight of prediction markets by filing a friend-of-the-court brief. Chair Mike Selig stated the agency acted to protect its jurisdiction over markets it has regulated for decades as derivatives contracts.
Selig said prediction markets have faced an “onslaught of state-led litigation” over the past year. He argued Congress granted the CFTC broad authority over commodity-based contracts, which he said encompasses modern prediction markets.
“To those who seek to challenge our authority in this space, we will see you in court,” he added. Selig noted these markets serve legitimate purposes like hedging risks and providing information on real-world events.
The legal dispute has implications for crypto-native prediction markets using blockchain and tokenized settlement. The CFTC’s assertion of exclusive federal jurisdiction seeks to prevent a fragmented state regulatory patchwork that could constrain market access.
Selig explicitly connected the agency’s stance to a broader shift in U.S. crypto policy. He said the administration has “reversed course on crypto” to ensure the country remains competitive in the digital asset space.
The commission’s move does not endorse any specific market or product. It frames prediction markets as a long-standing part of U.S. derivatives oversight and signals a willingness to litigate to preserve that framework.
The amicus filing sets the stage for further legal battles over regulatory jurisdiction. Outcomes could significantly shape how prediction markets operate under U.S. federal law moving forward.
