The U.S. CFTC withdraws the ban on political event contracts, regulatory stance shifts to support orderly innovation in prediction markets
The Chairman of the U.S. Commodity Futures Trading Commission (CFTC), Mike Selig, has withdrawn the proposal made by his predecessor in 2024 to ban 'political event contracts' and has rescinded the related guidance that had previously caused uncertainty in the industry.
Selig stated that the new rules will be strictly formulated based on the Commodity Exchange Act, with the core aim of promoting orderly and responsible innovation in the derivatives market.
Compared to the previous draft, which equated political event contracts with contracts for war and extreme violence events, categorizing them as 'not in the public interest', this definition has been completely overturned in the new regulations.
This policy shift has cleared key institutional barriers for the development of the prediction market industry. It not only provides a clearer and friendlier regulatory environment for event prediction platforms represented by Kalshi and Polymarket;
but also paves the way for large traditional financial institutions like Coinbase and the Chicago Board Options Exchange (Cboe) to enter and expand their business in this field.
In summary, the CFTC's proactive withdrawal of the controversial proposal and its open attitude towards innovative markets mark a new stage in the landscape of U.S. cryptocurrency regulation, which is officially entering a more pragmatic phase that emphasizes substantial influence.