CFTC chair highlights wide crypto agenda, including rules on DeFi, prediction markets

Commodity Futures Trading Commission chief Michael Selig updated his progress on guidance for DeFi developers, crypto derivatives and prediction markets.

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What to know:

• CFTC Chairman Mike Selig said the United States is reclaiming leadership in digital assets, unveiling a joint "Project Crypto" initiative with the SEC to end turf battles and coordinate oversight.
• Selig announced that the CFTC will issue guidance and has begun rulemaking on prediction markets, asserting the agency’s authority over event contracts as they grow into a major venue for trading on elections and real-world outcomes.
• The CFTC plans to clarify when DeFi software providers must register, update rules for leveraged and margined crypto spot trading, address the status of perpetual derivatives and consider how to regulate AI-driven trading systems in digital markets.

Calling the U.S. the “crypto capital of the world,” Commodity Futures Trading Commission (CFTC) Chairman Mike Selig updated his agency's ongoing plans to provide long-awaited regulatory clarity for decentralized finance (DeFi) developers, crypto derivatives and prediction markets.

Speaking this week at the FIA Global Cleared Markets Conference in Boca Raton, Florida, Selig said the U.S. is reclaiming leadership in digital assets through closer coordination between regulators. He said he and the Securities and Exchange Commission (SEC) Chairman Paul Atkins have put an “end to the days of CFTC-SEC infighting by partnering on the Project Crypto initiative.”

During his speech, Selig reiterated the CFTC will issue guidance to clarify how prediction markets, known as event contracts in regulation, can list and trade products under U.S. law and will launch a rulemaking process seeking public input on how the fast-growing sector should be overseen. Prediction markets are no longer a niche and have become a fast-growing ecosystem of trading platforms that allow users to trade contracts tied to elections, economic outcomes and real-world events.

Selig said that because “market participants deserve clarity” the agency intends to assert a more active role in regulating these markets and defending its authority over them amid ongoing legal challenges from several U.S. states. He repeated his sentiment from last month that the CFTC must be seen as the regulator for these markets, and he "will continue to assess litigation strategies to make sure the agency’s voice is heard."

DeFi developers and crypto derivatives

The CFTC, he said, also plans to address one of the crypto industry’s most contentious regulatory questions: “For too long, there has been an open question as to whether software providers trigger the CFTC’s registration requirements,” Selig said. “We intend to address this question head-on.”

The agency is also analyzing how U.S. law should treat several crypto trading structures that have historically operated in regulatory gray areas, including leveraged crypto spot trading and standards for margined spot trading on exchanges. Previous Acting Chairman Caroline Pham got started last year on erasing old guidance on "actual delivery" standards from President Donald Trump's first term so the regulator could write something friendlier to the industry spot-market practices.

The agency has also been addressing the classification of crypto perpetual derivatives, a dominant product in global crypto markets.

Read More: CFTC chief Selig to clear path for U.S. perpetual futures in coming weeks

The CFTC chairman also pointed to the rise of artificial intelligence (AI) and automated trading systems across digital markets and the need for regulatory frameworks that support innovation in these technologies.

Selig’s comments echo recent statements by NEAR co-founder Illia Polosukhin, who said AI agents will soon be the primary blockchain users, and Coinbase CEO Brian Armstrong, who wrote on X that “very soon there are going to be more AI agents than humans making transactions.”

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U.S. Treasury signals shift on crypto mixers, acknowledges legitimate privacy uses

A congressional report on implementing the Genius Act acknowledges the existence of lawful uses for blockchain privacy tools even as U.S. regulators pursue enforcement cases tied to illicit finance.

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