'See You in Court': CFTC Chair Defends Jurisdiction as States Fight Prediction Markets
Analysis
Price Impact
MedThe cftc's strong defense of its exclusive jurisdiction over commodity derivatives, including prediction markets, brings potential clarity to the regulatory landscape for assets often classified as commodities. while legal battles with states and potentially the sec will create short-term uncertainty, a unified federal approach under the cftc could reduce fragmentation.
Trustworthiness
HighDirect statements from the u.s. commodities and futures trading commission chairman and support from major industry players like coinbase's clo provide high confidence in the information's accuracy regarding regulatory intent.
Price Direction
NeutralThe immediate impact is neutral due to ongoing legal disputes, which introduce uncertainty. however, if the cftc successfully asserts its exclusive jurisdiction, it could lead to a more streamlined and predictable regulatory environment for crypto commodity derivatives in the long term, which is generally positive for market maturity.
Time Effect
LongResolving jurisdictional disputes between federal agencies and states is a complex and lengthy legal process. any definitive regulatory clarity and its subsequent market effects will unfold over an extended period.
Original Article:
Article Content:
U.S. Commodities and Futures Trading Commission Chairman Michael Selig hit back at states trying to challenge the regulator's jurisdiction over prediction markets in a new op-ed published Tuesday in The Wall Street Journal . "To those who seek to challenge our authority in this space: let me be clear. We will see you in court," Selig wrote. In the past year, a handful of states have issued cease and desist letters and gone toe to toe with prediction market operators in court in a bid to stop what they say is an unfair subversion of their gambling and gaming laws. And in several cases, prediction markets have fought back by suing state regulators . The legal tension has lead to members of the industry to call for more clarity from the CFTC. The Securities and Exchange Commission has even suggested that it might have some jurisdiction over the burgeoning industry. SEC Chairman Paul Atkins said last week that the Wall Street cop already has “enough authority” to regulate at least a portion of the booming prediction market sector. But Selig made the CFTC's position clear in his op-ed, arguing that the encroachment amounts to "legal attacks." The regulator has now filed a friend-of-the-court brief supporting Crypto.com in the Ninth U.S. Circuit Court of Appeals . "America is home to the most liquid and vibrant financial markets in the world because our regulators take seriously their obligation to police fraud and institute appropriate investor safeguards," he wrote. "Any erosion of the CFTC’s ability to regulate transactions in commodity derivatives is a direct threat to the markets and investors Congress intended the agency to oversee." Selig's statements have already been applauded by Coinbase Chief Legal Officer Paul Grewal, who thanked the CFTC chairman and added: "Exclusive jurisdiction means exclusive jurisdiction-- just as Congress mandated." Daily Debrief Newsletter Start every day with the top news stories right now, plus original features, a podcast, videos and more. Your Email Get it! Get it!