Chairman Selig Goes to Capitol Hill: Key Takeaways on Prediction Markets, Crypto and Enforcement

Just over 100 days into his tenure, Commodity Futures Trading Commission (CFTC or the Commission) Chairman Michael S. Selig appeared before the House Committee on Agriculture on April 16 for a wide-ranging hearing that touched on nearly every major issue facing the agency. Selig used the hearing to defend the Commission’s role in overseeing prediction markets and digital assets, while outlining its regulatory priorities and vision for the future of these rapidly growing markets.

Prediction Markets Take Center Stage

The hearing focused extensively on prediction markets, the most contentious issue on the CFTC’s plate. Selig repeatedly emphasized that the Commission has “broad exclusive jurisdiction” over event contracts, firmly stating that these products are derivatives instruments traded on federally regulated exchanges and fall squarely within the CFTC’s exclusive authority under the Commodity Exchange Act’s sweeping definition of “commodity” (which covers virtually everything except onions, certain securities and motion picture box office receipts).  

Selig noted that the Commission has issued a Prediction Markets Advisory and published an Advance Notice of Proposed Rulemaking (ANPRM) seeking public comment on a comprehensive regulatory framework, with comments due April 30.[1] He declined to prejudge the rulemaking process on questions about which contracts should receive streamlined approval and which should face heightened scrutiny, but his testimony left little doubt that the Commission intends to build out a comprehensive framework rather than restrict these markets. This tracks with the Commission’s recent legal posture. The CFTC has filed offensive suits against Arizona, Connecticut, and Illinois seeking declaratory judgments affirming its exclusive jurisdiction over event contracts traded on designated contract markets, and it joined the DOJ in seeking and obtaining a temporary restraining order in Arizona to block the state’s criminal enforcement action against Kalshi.[2]

Digital Assets and the Clarity Act

Selig was unequivocal in his support for bipartisan crypto market structure legislation, calling the Clarity Act “absolutely essential” and warning that each day Congress delays enacting this important legislation, it puts American investors and consumers at risk. He pointed to the recent joint SEC-CFTC interpretation clarifying which crypto assets are securities and which are commodities as a model for how the agencies can work together.[3] He highlighted the Commission’s progress on tokenized collateral relief, stablecoin guidance and obligations for software developers building in the United States.[4]

Selig also advocated for a uniform federal registration regime for crypto platforms, noting that the current patchwork of state money transmitter and virtual currency licensing creates confusion and gaps in consumer protection. He urged Congress to act quickly, emphasizing that legislation is key to providing certainty and bringing builders and innovators onshore to the United States. 

Enforcement and Market Integrity

Selig used the hearing to signal that the CFTC is investing heavily in its enforcement capabilities. He announced a “zero tolerance policy” toward fraud, manipulation, and insider trading across all CFTC-regulated markets.[5] He highlighted the hiring of David Miller, a former CIA officer and Southern District of New York prosecutor, as Director of Enforcement, and pointed to the agency’s efforts to incorporate AI-powered surveillance tools to keep pace with increasingly sophisticated markets. The Commission has also signed a Memorandum of Understanding with Major League Baseball to establish a framework for cooperation and information sharing to protect market and game integrity, a sign of the creative approaches the agency is taking as prediction markets expand.[6]

Looking Ahead

Today’s hearing confirmed that the CFTC’s role in prediction markets and digital assets will only continue to grow, and that congressional scrutiny will grow alongside it. With the ANPRM comment period closing in less than two weeks (April 30) and multiple federal circuits now addressing the preemption question, market participants should pay close attention to the Commission’s next moves. For those building, investing, or trading in these markets, the message from today’s hearing was clear: the CFTC wants to be a partner for responsible innovation, and the regulatory framework is moving fast.