CFTC Chair Defends Federal Authority Over Prediction Markets Amid State Lawsuits

Michael Selig, chair of the Commodity Futures Trading Commission (CFTC), said the agency is pushing back against what he described as an “onslaught of state-led litigation” targeting prediction market platforms. In a public statement, Selig confirmed the CFTC filed an amicus brief to defend its exclusive jurisdiction over event-based contracts, which the agency considers part of the derivatives market.

Selig argued that prediction markets have operated under CFTC oversight for more than two decades and serve legitimate economic purposes, including risk hedging and price discovery. He warned that attempts by state regulators to assert authority over these platforms would be contested in court.

Legal Disputes With States Intensify

Several state regulators have recently challenged platforms offering event contracts, including Coinbase, Crypto.com, Kalshi and Polymarket. Polymarket has filed its own lawsuit against Massachusetts, asserting that federal regulators hold primary oversight authority.

A group of 23 US senators has urged Selig to refrain from intervening in ongoing litigation, arguing that federal actions could conflict with state gambling laws.

The dispute unfolds as lawmakers consider broader digital asset legislation, including the CLARITY Act. The outcome of these legal battles could shape how prediction markets are regulated across federal and state jurisdictions in the years ahead.

Disclaimer

This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.