CFTC Escalates Prediction‑Market Fight and Moves to Codify Wallet Protections
The push signals a shift toward clear national rules that could override state gambling claims.
Overview
- CFTC Chair Michael Selig said the agency will turn its Phantom no‑action letter into a formal rule that can spare non‑custodial crypto wallet developers from broker registration if they never hold customer funds.
- The commission is pressing its claim over prediction markets by suing New York and Wisconsin and filing briefs in related cases, arguing event contracts should be treated as federally regulated derivatives under the Commodity Exchange Act.
- State attorneys general argue these contracts are bets offered for entertainment under state gambling laws rather than products that fall under federal derivatives rules.
- Prosecutors in the Southern District of New York charged an active‑duty Army Special Forces master sergeant with using secret military information to trade event contracts, and the CFTC filed a parallel civil case the same day.
- At Bitcoin 2026, federal leaders previewed an innovation exemption to let tokenized securities test in the market as senators advanced the CLARITY Act and moved to bar officials from using prediction platforms.