CFTC has removed a controversial proposal to ban political and sports‑related prediction markets, while simultaneously launching a joint crypto rulemaking push with the SEC that aims to keep digital asset trading onshore.​

In his first public speech as the Chair, Michael Selig said he has directed CFTC staff to withdraw the 2024 event contracts rule proposal that would have prohibited political and sports‑related event contracts.

“I have directed CFTC staff to withdraw the 2024 event contracts rule proposal that would prohibit political and sports-related event contracts and the 2025 staff advisory, which cautioned registrants about offering access to sports-related event contracts due to ongoing litigation.”

Selig said the advisory, issued with the aim of flagging legal risk, had instead “contributed to uncertainty” in the market and needed to be rolled back.​

2024 Event Contract Ban Pulled Back

Selig framed the reversal as the first step in a broader reset of the agency’s approach to prediction markets, which he called “event contracts” and said have operated within the CFTC CFTC The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss Read this Term’s jurisdiction for more than two decades.

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He has now ordered staff to begin drafting a new event‑contracts rulemaking designed to provide “clear standards” and legal certainty for exchanges and intermediaries.

The chairman also instructed staff to reassess the CFTC’s role in pending federal court cases involving jurisdictional issues and to coordinate with the SEC on a joint interpretation of Title VII definitions to better distinguish between commodity options, security options, swaps and security‑based swaps.​

Keep reading: New CFTC Chief Previously Led SEC's Crypto Task Force – A Clear Signal to Markets

At the same time, Selig used the speech to set out “Project Crypto,” a formal partnership with SEC Chairman Paul Atkins that will create a shared federal framework for digital asset markets.

Joint “Project Crypto” and Perps Onshoring

The initiative will focus on a common crypto asset taxonomy, clearer jurisdictional lines between the agencies and the removal of duplicative compliance Compliance In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a Read this Term requirements that have pushed activity offshore.

Selig backed Atkins’s view that “most crypto assets trading today are not securities” and has asked staff at both agencies to consider joint codification of Atkins’s taxonomy as an interim measure while Congress finalizes broader market‑structure legislation.​

Beyond prediction markets, Selig directed CFTC staff to develop rules expanding eligible tokenized collateral, onshoring “true” perpetual futures and clarifying when leveraged retail crypto contracts can rely on the “actual delivery” exception off‑exchange.

He also floated the creation of a new designated contract market category for retail leveraged crypto trading and signaled that the CFTC will explore safe harbors and potential innovation exemptions for software developers, non‑custodial wallets, DeFi protocols and other on‑chain infrastructure.