“See You in Court”: CFTC Claims Sole Authority Over Prediction Markets, Puts States on Notice
Chairman Selig breaks with his unassuming Senate testimony on prediction markets
Welcome to the Wednesday edition of the Crypto In America newsletter!
What you’ll read: The CFTC wants sole control over prediction markets, the White House is considering another stablecoin yield meeting tomorrow, and the week’s top stories.
The CFTC’s new Chairman, Michael Selig, had a message for anyone questioning the agency’s turf on prediction markets: Don’t.
“See you in court,” the Trump appointee said in a video posted on X Tuesday morning, announcing the agency had filed an amicus brief in the Ninth Circuit defending its sole authority to regulate prediction markets.
Specifically, the case (Crypto.com vs. Nevada) centers on whether federal commodities law preempts state gaming (gambling, not video games) regulation. Last year, the Nevada Gaming Control Board, the state agency responsible for regulating and enforcing gaming laws, moved to block Crypto.com’s sports event contracts, calling them unlicensed gambling. Crypto.com fired back, claiming its products are federally regulated derivatives overseen by the CFTC, and that Nevada was overstepping its jurisdiction.
A district court judge sided with Nevada, and now the fight is before the Ninth Circuit Court of Appeals. The CFTC is weighing in to argue that it, not Nevada, has the final say over prediction markets.
Former CFTC Chairman Chris Giancarlo filed his own amicus brief this month supporting the agency’s claim to exclusive jurisdiction, citing a recent flood of regulatory actions by states like Nevada, New York and Massachusetts, threatening that authority.
“The CFTC will no longer sit idly by while overzealous state governments undermine the agency’s exclusive jurisdiction over these markets by seeking to establish statewide prohibitions on these exciting products,” Selig said in a Wall Street Journal op-ed.
Selig’s comments are a notable departure from his confirmation testimony last year, when he told the Senate Agriculture Committee he would defer to the courts on the legal status of event contracts.
Prediction markets have surged in popularity over the last three years, attracting interest from both consumers and companies. Dozens of major brands have inked deals with Kalshi and Polymarket, while platforms like Coinbase, Gemini, Crypto.com and Robinhood have also sought to offer prediction markets to capitalize on bettors speculating on everything from geopolitics to SuperBowl half-time performances.
On Wednesday, crypto asset manager Bitwise filed with the Securities and Exchange Commission to list a suite of prediction market ETFs that would track contracts tied to the 2028 U.S. presidential election and upcoming House and Senate midterms. Assuming SEC approval, the products would launch under “PredictionShares,” a new Bitwise platform focused on providing exposure to prediction markets, allowing investors to wager on election outcomes in a regulated format.
Bitwise’s CIO Matt Hougan told Crypto In America that prediction markets are accelerating in both scale and importance, making client exposure an opportunity the firm couldn’t pass up. Roundhill and GraniteShares have also filed for prediction market ETFs.
But not everyone is thrilled about prediction markets hitting the big leagues, or being regulated by them. In response to Selig’s video statement, Utah Governor Spencer Cox took to X to condemn their growth in his state.
“These prediction markets you are breathlessly defending are gambling — pure and simple,” he wrote. “They are destroying the lives of families and countless Americans, especially young men. They have no place in Utah.”
Sen. Elizabeth Warren (D-Mass.) didn’t hold back either.
“President Trump’s CFTC Chair is trying to strip states of their authority to regulate gambling within their borders and hamstring their ability to protect Americans from getting ripped off,” she said. “The CFTC should focus on ensuring our derivatives markets don’t blow up the economy again, not helping corrupt political insiders cash in.”
White House Mulls Third Crypto-Bank Meeting on Stablecoin Yield
The White House is considering hosting a third meeting on Thursday between crypto and bank representatives, continuing its efforts to spur agreement on stablecoin yield, three sources familiar with the matter tell Crypto In America.
The White House floated a Thursday meeting to invitees yesterday, but whether it will happen remains uncertain. It’s also unclear what the starting points for the meeting will be, or if the Digital Chamber’s Friday proposal, which would let payment stablecoins earn yield through a DeFi liquidity exemption, will serve as one.
While the banks have not formally weighed in on the Digital Chamber’s proposal, a source close to the banking side of the talks said it appears “constructive,” and shows some concessions on idle balances, though yield protections still need more detail.
The source also questioned the Chamber’s influence, since other trade associations, including the Crypto Council for Innovation and the Blockchain Association, have led negotiations so far. Still, they noted there is “productive momentum” despite more work to be done.
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Midweek Recap
ICYMI: Here are some of the biggest stories making headlines this week.
The World Liberty Financial Forum kicks off at Mar-a-Lago today, and will see leaders from crypto, finance, tech, media, and government attending. Speakers include Goldman Sachs CEO David Solomon, Nasdaq CEO Adena Friedman, CFTC Chairman Michael Selig, Third Point founder Dan Loeb, FIFA President Gianni Infantino, and rapper Nicki Minaj.
Kraken says it will fund Trump Accounts for all babies born in 2026 in Wyoming, where the exchange is headquartered.
X’s head of product says the platform will launch “Smart Cashtags” in the coming weeks that will enable users to trade stocks and crypto directly from their timelines.
CFTC Chairman Michael Selig said the agency has filed an amicus brief in the Crypto.com vs. Nevada appeal.
Bridge, a stablecoin platform owned by Stripe, received conditional approval from the OCC for a national bank trust charter.
Gemini’s COO, CLO, and CFO have left the company as its operating expenses are projected to hit $530 million, driving adjusted EBITDA losses of around $260 million.
DeFi exchange Hyperliquid launched a DeFi-focused policy arm, the Hyperliquid Policy Center, that’s being led by crypto lawyer and policy expert Jake Chervinsky. The initiative is backed by a $29M HYPE token donation.
Wall Street PE firm Apollo Global is moving into DeFi lending through a new deal with Morpho. Under the deal, Apollo or its affiliates may acquire up to 90 million MORPHO tokens over the next four years, equivalent to 9% of the token’s total supply.
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