CFTC Selig is offering the prediction markets a deal they hate to accept

CFTC Chairman Michael Selig is trying to move the futures and crypto markets out of the legal gray area by repealing the de facto ban and replacing it with derivatives-style rules the agency oversees, not the state.

CFTC Chairman Michael Selig is trying to pull the futures and crypto markets out of the legal gray area and into a federal framework that looks more like traditional derivatives — while also cracking down on states and gamblers.

According to a new report on CoinDesk, “Selig reiterated that the CFTC will issue guidance to clarify how futures markets, known as regulated event contracts, can list and trade products under U.S. law, and will begin a rulemaking process to solicit public input on how the fast-growing sector should be monitored.”

Event contracts: from ban threat to rule book

In his first policy speech on January 29, 2026, Selig said the CFTC would rescind the 2024 proposal, which effectively banned contracts for sports and political events, and withdraw the 2025 staff advisory that warned platforms about sports markets, acknowledging that the advice indirectly added to our markets. Instead, he ordered staff to draft new “event contract rules” to “clear standards for event contracts that provide certainty to market participants” and “support the responsible development of event contract markets,” which the CFTC views as a tool to protect risk and aggregate information, not just terms.

Currently, Selig endorses turf. In a speech, an Axios interview, and a Wall Street Journal interview covered by the AP, he argued that the futures markets are subject to the Securities Exchange Act and that the CFTC has “exclusive jurisdiction” over them, promising that the agency “will no longer stand idly by while overly aggressive governments try to undermine governments (…) these innovative products.” The Commission has already asked the Ninth Circuit Court to submit an amicus brief that would establish CFTC-registered exchanges in the fight against Nevada’s attempt to regulate event contracts as gambling, forming a final preemptive approach that could go all the way to the Supreme Court.

Insider trading, control and Crypto project

Selig’s position is not a free pass. He has repeatedly touted exchanges as the “first line of defense” against insider trading, and his law firm’s opinion in the newspaper emphasized that prediction platforms need to improve compliance, particularly around “permitting the use of non-public information.” The Department of Justice is already making the rounds: the US Attorney for SDNY has publicly warned that “placing a bet through the prediction market does not insulate you from fraud,” citing cases where bookmakers used inside information about the availability of a basketball player to make bets – the same logic that can apply to political markets, politics or wars.

Crypto is woven into this. In the same speech, Selig announced the “Crypto Project,” a formal partnership with the SEC to deliver “clear and consistent rules of the road” for digital asset markets, including joint work on crypto-asset taxonomy and the expansion of tokenized collateral rights. He also said he wants to “put new perpetuities and other derivatives on the ground so that they can develop … subject to appropriate safeguards,” indicating that the CFTC is willing to own stocks, tokenized stocks and futures markets – as long as they move within its regulatory perimeter.

Let’s be clear: Selig offers the crypto and prediction markets a deal. The CFTC is fighting with states that want to treat everything as gambling and abandon sports bans and political contracts – but in return, platforms like Polymarket and Kalshi must adopt strict controls, insider trading compliance and derivatives-style rules, rather than the first wave of degen.