CFTC Issues First Prediction Market Guidance After Years of Silence
The CFTC and SEC signed a historic memorandum of understanding Wednesday to end decades of regulatory turf wars, one day after CFTC Chair Michael Selig classified event contracts as a financial asset class.
Key Takeaway
CFTC finally gave prediction markets regulatory clarity while JPMorgan faces fraud claims for banking a ₱19.51 billion ($328 million) Ponzi.
CFTC Chair Michael Selig ended years of regulatory silence on prediction markets Thursday, calling them one of the most innovations in financial markets.
The CFTC issued a staff advisory classifying event contracts on platforms like Kalshi and Polymarket as a financial asset class. Selig said the CFTC failed to provide guidance for markets being used by millions of Americans and that it ends now. The agency also submitted an Advanced Notice of Proposed Rulemaking to the Federal Register.
Selig was sworn in as the 16th CFTC Chairman in December 2025 after serving as chief counsel of the SEC's Crypto Task Force. He previously worked as a partner at an international law firm advising CFTC-regulated clients including futures commission merchants and digital asset firms.
The move came a day after the SEC and CFTC signed a memorandum of understanding on regulatory coordination Wednesday. SEC Chair Paul Atkins said regulatory turf wars and duplicative agency registrations between the SEC and CFTC stifled innovation and pushed market participants to other jurisdictions for decades.
While regulators coordinated, JPMorgan Chase faced a proposed class action lawsuit filed Tuesday in US District Court for the Northern District of California. Investors accused the bank of facilitating a ₱19.51 billion ($328 million) crypto Ponzi scheme run by Goliath Ventures. The lawsuit claims JPMorgan knew Goliath was acting as a private equity cryptocurrency pool operator investing money for investors without being licensed to sell these investments.
Goliath Ventures CEO Christopher Delgado was arrested on February 24 by the US Attorney's Office for the Middle District of Florida. The scheme allegedly defrauded more than 2,000 investors between January 2023 and January 2026, with JPMorgan serving as the sole banking institution from January 2023 to May or June 2025. Delgado faces a maximum federal prison sentence of 30 years if convicted on all counts.
This article was written based on reporting from Cointelegraph.
