cftc

As of February 2026, the Commodity Futures Trading Commission (CFTC) has shifted to an assertive pro-industry stance, formally backing prediction markets as legitimate commodity derivatives. Under the leadership of Chairman Michael S. Selig, the agency is actively defending its exclusive jurisdiction over these markets against state-level efforts to regulate them as gambling. 

Recent Regulatory Actions (January–February 2026)
The CFTC has taken several concrete steps to remove regulatory barriers: 
Withdrawal of Proposed Bans: On February 4, 2026, the CFTC officially withdrew a 2024 proposed rule that would have prohibited political and sports-related event contracts. Chairman Selig characterized the previous proposal as "policy overreach".
Retraction of Staff Advisories: The agency withdrew a 2025 staff advisory that cautioned exchanges about offering sports contracts due to potential litigation.
Initiation of New Rulemaking: The CFTC has directed staff to draft a new regulatory framework grounded in the Commodity Exchange Act to provide "clear and durable standards" for the industry. 

Legal Defense and Court Interventions
The CFTC is currently in open legal conflict with state regulators to prevent what it calls a "power grab" by state gaming boards. 
Amicus Briefs: On February 17, 2026, the CFTC filed a "friend of the court" brief in the Ninth Circuit Court of Appeals. The filing supports operators like Kalshi and Polymarket in their battle against Nevada and other states, arguing that event contracts are federally regulated derivatives, not illegal wagering.
Jurisdictional Battle: States such as Nevada and Massachusetts argue that sports-related contracts function as unlicensed gambling. While the Ninth Circuit recently denied a stay for Kalshi in Nevada, a Massachusetts appeals court granted a temporary stay on February 18, 2026, allowing operations to continue during an expedited appeal.

Users interested in specific legal filings can monitor the CFTC Press Room for official amicus brief updates and rulemaking announcements.

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For years, regulators called it gambling. Today, they officially called it "Hedging."
While the retail crowd is chasing green candles, a massive legal earthquake just happened in Washington, D.C. that changes the future of crypto utility forever.
The CFTC (Commodity Futures Trading Commission) has officially signaled it will back prediction markets like Kalshi and Polymarket in their legal fight against state gambling regulators.
This isn't just a legal brief; it is a declaration of independence for decentralized information markets. Here is why this is the most important fundamental shift of February 2026.
🏛️ The News: Feds vs. States (And Crypto Wins)
On February 18, 2026, reports confirmed that the CFTC, under Chairman Michael Selig, is preparing to file a "friend of the court" brief supporting prediction markets in federal court.

The Conflict: State regulators (like Nevada) want to ban platforms like Polymarket and Kalshi, classifying them as "unlicensed sports betting".The CFTC’s Stance: The Feds are stepping in to say "Stop." They are asserting that these are derivative contracts under federal jurisdiction, not casino bets.The Action: The CFTC is actively withdrawing previous proposals that sought to ban political and sports contracts, effectively clearing the runway for these markets to operate legally nationwide.
🧠 Why This Changes Everything
To a "Builder" like me, this is bigger than an ETF approval. This is the government validating "Truth-as-a-Service."
1. From "Betting" to "Hedging."
By classifying these contracts as commodities, the government is admitting that prediction markets serve a critical economic purpose: Price Discovery.
Farmers hedge against corn prices.Businesses can now hedge against election outcomes, policy shifts, or even rate hikes using these platforms.Crypto isn't just for speculation anymore; it's for risk management.
2. The "Oracle" Boom
This regulatory green light is a massive catalyst for the underlying tech that powers these markets.
Oracles: If trillions of dollars flow into prediction markets, the decentralized oracles that resolve these markets (like Chainlink, UMA, or Pyth) become the most valuable infrastructure on the blockchain.Data Integrity: We are moving into an era where "Market Truth" is trusted more than "Media Truth."
🔮 The 2026 Playbook
The CFTC just gave us the roadmap. The "Gray Area" era of prediction markets is ending.
Watch the Infrastructure: Don't just trade the outcome of an event; invest in the platforms and protocols that host the events.The "Polymarket Effect": Expect a surge in volume now that the regulatory fear is vanishing. Institutional capital can finally enter the arena.
🦁 Final Thought
The US Government just fought a battle for crypto, not against it.
They realized what we’ve known all along: Markets are the ultimate source of truth.
👇 Do you use prediction markets to hedge real-world risks, or just for fun? Let me know below!

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Prediction markets are no longer operating in the shadows.
With increasing signals of regulatory clarity and CFTC involvement, we may be witnessing a structural shift in how the U.S. treats event-based financial contracts.
This isn’t just about betting on outcomes.
It’s about financialization of uncertainty.
🏛 What’s Changing?
For years, prediction markets existed in a gray zone — caught between:
• Gambling regulation
• Derivatives oversight
• Federal vs. state jurisdiction
Now, with the CFTC stepping in more clearly around event contracts, the narrative is shifting from “speculative betting” to “regulated financial instruments.”
That’s a massive difference.
📊 Why Traders Should Care
Prediction markets can impact:
✅ Political risk pricing
✅ Macro event hedging
✅ Election volatility
✅ Commodity & policy expectations
✅ On-chain event derivatives
If properly regulated under derivatives law, these markets could:
• Attract institutional liquidity
• Improve price discovery
• Reduce legal uncertainty
• Open new structured trading products
⚖️ The Big Debate
The core question remains:
Are event contracts financial hedging tools…
or simply digital gambling?
The answer will shape:
• Jurisdictional authority
• Exchange licensing models
• Tokenized prediction protocols
• Future crypto derivatives products
Court decisions and regulatory rulings in this space could define the next era of financial innovation.
🔮 The Bigger Picture
If prediction markets gain formal regulatory backing:
• Crypto-native platforms gain legitimacy
• Institutional participation increases
• Volatility markets expand
• Event-driven trading becomes mainstream
This isn’t just policy news.
It’s infrastructure evolution.
Markets price risk.
Prediction markets price events.
The real alpha?
Understanding regulatory shifts before liquidity arrives.
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📈 CFTC’s Position on Prediction Markets
The Commodity Futures Trading Commission (CFTC), the federal regulator for commodity derivatives in the United States, is increasingly backing prediction markets — platforms where people trade contracts tied to the outcomes of future events (like elections, weather, sports results, or economic data).
Here’s what’s unfolding:
🛡 Federal Support Over State Bans
Recently, the CFTC filed a legal brief affirming that it has exclusive jurisdiction over prediction markets as a type of commodity derivative. That means it argues states do not have the authority to ban or independently regulate these markets if they fall under federal law.
The Commission’s chair has publicly defended the idea that prediction markets help hedge risk and aggregate information about future events — functions that are seen as legitimate finance activities, not just gambling.
📜 Regulatory Shift Toward Clarity
Under new CFTC leadership, the agency has withdrawn earlier proposals that would have restricted sports and political event contracts — a notable shift from prior uncertainty or restriction.
The CFTC plans to draft new, clearer rules specifically for “event contracts,” aiming to balance innovation with investor protections.
⚖️ Ongoing Legal Battles
Many states (e.g., Nevada, Massachusetts) are suing to block prediction market platforms, claiming they are unlicensed gambling operations — especially for sports outcomes. These cases are testing whether federal authority truly preempts state gambling laws.
The CFTC’s backing means it is likely to defend federally regulated platforms in court, potentially up to the U.S. Supreme Court.
🔍 Industry Impact
Major platforms — like Kalshi and Polymarket — are now operating under CFTC-regulated frameworks and in some cases have received no-action relief or formal approval to serve U.S. customers.
Their success and federal regulatory coverage have fueled growth and investor interest, though critics still argue about gambling harms and consumer protections.
🧠 In Simple Terms
The CFTC is actively supporting and defending prediction markets as legitimate financial instruments under federal derivatives law. It’s pulling back restrictive proposals and working to create clearer rules so these markets can operate within a regulated framework — even as many states challenge that federal authority.