Commodity Futures Trading Commission to back Crypto.com appeal as states challenge federal regulation of prediction markets

Commodity Futures Trading Commission Chair Michael S. Selig published an op-ed asserting that prediction markets, or “event contracts,” fall within the CFTC’s exclusive jurisdiction and announcing that the agency will file a friend-of-the-court brief supporting Crypto.com in an appeal before the Ninth U.S. Circuit Court of Appeals. The piece argues that state lawsuits portraying these contracts as gambling seek to impose statewide prohibitions that would bar access to federally regulated event-contract markets. The op-ed cites nearly 50 active state-driven cases affecting CFTC-registered exchanges including Kalshi, Polymarket, Coinbase and Crypto.com. It argues that event contracts are “swaps” under the Commodity Exchange Act and that Congress granted the CFTC comprehensive authority over such commodity-based contracts, alongside federal safeguards such as exchange market surveillance and Bank Secrecy Act obligations for CFTC-registered entities to collect customer information for anti-money-laundering measures and to prevent insider trading.