CFTC Plans New Rules for Prediction Markets

The U.S. Commodity Futures Trading Commission (CFTC) has decided to withdraw prior proposed bans on prediction market event contracts from 2024 and 2025. The move seeks to address past regulatory uncertainties faced by participants.

CFTC Chairman Michael Selig has announced the drafting of new rules to bring regulatory certainty to prediction markets. The CFTC will also coordinate jurisdictional boundaries with the Securities and Exchange Commission (SEC).

Market Confidence Expected to Rise Amid New Rules

The decision may boost market confidence by providing clarity to stakeholders. Although no specific funding allocations were mentioned, the move is expected to influence both market participants and regulatory bodies.

The overhaul aims to support lawful innovation in markets without directly impacting specific cryptocurrencies like ETH or BTC. Historical trends show that regulatory clarity often correlates with market growth.

Historic CFTC Decision on Innovation and Stability

This announcement follows prior CFTC support for “self-certification” of event contracts, a practice that grew during the Trump administration but led to uncertainty following proposed bans. Past regulatory shifts have similarly aimed for clarity.

According to Kanalcoin, while current changes don’t directly affect cryptocurrencies, the responsible innovation ethos may encourage broader market adoption. Past data indicates that clear regulations often positively affect market stability and innovation.

For too long, the CFTC’s existing framework has proven difficult to apply and has failed our market participants. That is something I intend to fix by establishing clear standards for event contracts that provide certainty to market participants. — Michael Selig, Chairman, CFTC