CFTC chair Michael Selig: Prediction markets, insider trading in commodities, and the need for clear crypto rules

CFTC Chairman Michael Selig says prediction markets are becoming embedded in pop culture and that their regulatory landscape in the US is liberalizing, but unresolved issues remain — notably ambiguous outcomes and insider trading risks. Selig emphasised the CFTC’s pivotal role in shaping emerging markets including prediction markets and crypto, noting exchanges act as self‑regulatory organisations under CFTC rule books. He argued the definition of "commodity" is broad, giving the agency authority to police insider trading in commodities markets similar to the SEC’s powers in securities. Selig warned some event‑based contracts (eg, Super Bowl halftime props) may look like prop bets rather than true financial instruments, raising manipulation and integrity concerns. He contrasted regulated derivatives — which provide liquidity, margining and formal controls across a vast notional swaps market — with informal betting against the house. Blockchain and tokenisation, he said, will change settlement and exchange operations; the economic lines between futures and prediction markets are narrowing. Selig called for coordinated, notice‑and‑comment rulemaking between the CFTC and SEC to avoid incompatible standards as traditional and decentralized finance converge. He highlighted staffing needs at the CFTC, the importance of institutional access (margin and brokers), and backing for a "clarity act" style framework to keep markets onshore. Overall, Selig urged clearer, harmonised regulation to let prediction markets and crypto flourish while protecting market integrity and investors.