CFTC vs States: Prediction Markets & CLARITY Act Updates 2026
The U.S. crypto space is facing a major regulatory showdown. The CFTC recently filed a brief claiming exclusive federal authority over prediction markets like Kalshi, Polymarket, and Crypto.com, directly challenging states such as Nevada and Massachusetts. The commission argues these platforms fall under the Commodity Exchange Act as derivatives, not state gambling laws. This could set a landmark precedent, clarifying whether prediction markets are federally regulated or still subject to a patchwork of state rules.
At the same time, the CLARITY Act is gaining attention in Congress. Aimed at defining clear oversight for crypto assets, the bill would split authority between the SEC and the CFTC. Senators and industry leaders hint that it could pass by April 2026, bringing much-needed clarity for exchanges, tokens, and derivatives. If passed, it would mark a huge step toward regulatory certainty and broader institutional adoption in the U.S. crypto market.
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