A New York Times investigation has put the Commodity Futures Trading Commission’s crypto enforcement under the microscope, reporting that career staff who flagged problems at prediction-market firms were suspended, investigated and ultimately pushed out. What the NYT found - Several long-serving CFTC officials raised compliance concerns tied to prediction markets operated by Polymarket, Crypto.com and an affiliate of Gemini. Staff questioned consumer protections, fraud controls and whether the Gemini affiliate had completed a required regulatory review. - According to the NYT, two officials who raised those questions were placed on administrative leave by late 2025, and three other employees working on crypto enforcement faced similar actions. - The report also names then-acting CFTC chair Caroline Pham and senior counsel Brigitte Weyls as having later helped the firms advance their plans inside the agency. Broader enforcement pullback - The NYT says the CFTC has scaled back crypto enforcement under the current administration: at least five crypto probes were reportedly dropped and the agency filed only two crypto enforcement actions—both against individual operators. - Staff apparently perceived an internal warning not to rock the boat: “Don’t cause trouble,” the NYT quotes. The White House pushed back on suggestions of conflict, with spokesman Davis Ingle telling the paper, “There are no conflicts of interest.” Policy shifts and regulatory steps - The CFTC has also taken regulatory steps that reshape prediction-market oversight. It issued no-action relief for fully collateralized event contracts listed on regulated exchanges, easing some swap-reporting and recordkeeping obligations for designated contract markets, clearing firms and market participants. - In March the agency opened a broader rulemaking process, asking for public comment on event contracts, public interest limits, cost-benefit issues and potential future rules—signaling a move to formalize federal policy for prediction markets. State fights and federal pushback - Prediction market platforms remain embroiled in state-level legal battles even as the CFTC asserts more federal authority. The agency has challenged state actions in Arizona, Connecticut, Illinois, New York and Wisconsin. - On April 24 Reuters reported the CFTC sued New York, accusing the state of encroaching on federal jurisdiction after New York brought cases against Coinbase Financial Markets and Gemini Titan. Regulatory capacity and Congress - Lawmakers have raised alarms about the CFTC’s thin leadership. The House Agriculture Committee recently urged President Trump to fill the agency’s four vacant commissioner seats, warning that a one-member commission is ill-equipped to handle an expanding crypto agenda and complex prediction-market issues. Polymarket’s path back to the U.S. - Polymarket, barred from the U.S. for four years after a 2022 enforcement action and a $1.4 million settlement, has reportedly been in active talks with the CFTC to lift that ban. Negotiations focus on contract design, KYC and reporting. - In 2025 Polymarket acquired QCX LLC—a CFTC-registered exchange—for about $112 million, a move that could provide a regulated path back into the U.S. market if regulators sign off. Where this leaves crypto oversight - The dispute is unfolding as Congress weighs broader crypto rules. The Senate Banking Committee recently advanced the CLARITY Act in a 15–9 vote; that bill would split digital-asset oversight between the SEC and the CFTC, reshaping which federal agency controls which products. Bottom line: The NYT investigation raises serious questions about whether internal agency dynamics and leadership choices have blunted CFTC crypto enforcement just as the agency retools rules for prediction markets and fights jurisdictional battles with states and the courts. The outcome of agency-level decisions, ongoing rulemaking and congressional legislation will shape how—and who—regulates prediction markets and other crypto products in the U.S. Read more AI-generated news on: undefined/news