Commodity Futures Trading Commission (CFTC) Chairman Michael Selig has ordered his agency to intervene in lawsuits involving prediction markets, as jurisdiction over event contracts lies with the federal derivatives watchdog, not state authorities.
In this regard, the agency filed an amici curiae opinion (friend of the court) in defense of what Selig called his «exclusive jurisdiction» over prediction markets, which he equates with derivatives.
Selig said government entities challenging the CFTC’s authority over event contracts will face the agency in court in cases against platforms like Coinbase. Crypto.com, Kalshi и polymarket.
Previously, before Donald Trump’s return to the White House, the CFTC attempted to close some of the platforms’ political and event-related contracts. polymarket и KalshiHowever, the Commission dropped the legal proceedings after Trump’s team updated the agency’s leadership.
The Commodity Futures Trading Commission’s new initiative to regulate prediction markets has met with resistance. Utah Governor Spencer Cox, for example, wrote on social media that he doesn’t recall the CFTC having the authority to regulate the «derivatives market» for «LeBron James rebounds.»
He called these products «pure gambling» that harms families and young people. Cox promised to use all his powers to defeat the CFTC in court.
Meanwhile, lawyers polymarket sued the state of Massachusetts, arguing that only the CFTC can regulate these markets. Coinbase took similar action, suing Connecticut, Illinois, and Michigan for attempting to classify their products as games.