Overview
On January 29, 2026, Commodity Futures Trading Commission (CFTC) Chairman Michael Selig and Securities and Exchange Commission (SEC) Chairman Paul Atkins unveiled joint agency plans to further the Trump administration's policy goal of making the United States the world's crypto capital. The remarks were the first made by Chairman Selig since being sworn in as CFTC Chairman on December 22, 2025. In a signal of forthcoming harmonization efforts, Chairman Selig noted that market participants should be able to offer "multiple products through a single platform" without dealing with overlapping regulatory regimes and an "inefficient patchwork of registrations."
The speech offers crypto and prediction market participants their first insights into how new CFTC leadership intends to regulate and approach some of the most persistent impediments constraining further developments in US crypto and prediction markets.
Here are some key takeaways from the event:
The CFTC and SEC will jointly focus on clarifying product classification ambiguities and uncertainties.
Notably, this will include:
- Specifying the appropriate product classification (and regulator) for certain crypto assets even prior to potential market structure bill passage. Previously, Chairman Atkins has discussed the importance of establishing a clear token taxonomy that would enable market participants to delineate between security and non-security digital assets.[1] Chairman Selig echoed that belief in his prepared remarks at the event, noting his intent to "advance a clear crypto asset taxonomy, clarify jurisdictional lines, remove duplicative compliance requirements, and reduce regulatory fragmentation—ensuring that innovation takes root on American soil, under American law, and in service of American investors, customers, and businesses."[2]
- Chairman Selig noted that the taxonomy would provide that digital commodities, digital collectibles, and digital tools are not "securities," even when sold as part of an investment contract. Chairman Selig will instruct CFTC staff to work with SEC staff on formalizing the token taxonomy while Congress finalizes legislation.[3]
- A joint agency interpretation further delineating swaps from security-based swaps (SBS), and commodity options from security options, focused on resolving event contract or prediction market product classifications. Chairman Selig's remarks referred to the interpretation within the context of prediction market contracts; however, the original swaps product rule was issued by both agencies[4] nearly 15 years ago and would benefit from clarifications in other contexts as well.[5] The agencies could seek to further delineate between swaps and SBS, and could consider revisiting their joint approach to "mixed swap" regulation, which splits jurisdictional oversight between the agencies.
- A new rulemaking and regulatory framework for retail commodity transactions with virtual currency and other crypto underliers.[6] Several weeks after Acting Chair Pham withdrew the CFTC's virtual currency actual delivery guidance in 2020, the CFTC will undergo at least one rulemaking process to codify what is expected to be a broader "actual delivery" exemption, enabling additional leveraged virtual currency (and potentially other) contracts to legally trade off-exchange. For on-exchange offerings, the CFTC will look to create a new DCM registration category specific to retail commodity transactions, and separate retail commodity transaction rules for existing DCMs that offer the contracts on their current DCM platform.[7]
Perhaps the most notable development from the event was Chairman Selig's approach with respect to the agency's oversight of prediction markets.[8]
During his confirmation hearing, the chair expressed a willingness to wait for litigation to resolve key issues impacting event contract markets. Since being confirmed, we now understand that, without waiting for the resolution of litigation, the CFTC will imminently involve itself in the regulation of prediction markets, including by:
- Withdrawing the notice of proposed rulemaking regarding event contracts, issued in 2024.[9] We note that the CFTC has previously acted to remove public comments from the administrative record with respect to an open comment period that follows a withdrawn rulemaking.[10]
- Withdrawing the 2025 advisory, cautioning FCMs and other intermediaries against offering sports event contracts to their customers in light of ongoing litigation.[11]
- Initiating a new rulemaking process that would "establish[] clear standards for event contracts that provide certainty to market participants."[12]
- Reconsidering the CFTC's participation in litigation involving "jurisdictional questions" at issue. Under Republican leadership, the commission has been silent as event contract litigation plays out at the federal court level.
We expect the CFTC to attempt to assert its exclusive jurisdictional authority over sports and other event contracts when listed on a DCM by filing amicus briefs in one or more cases at the federal or state level. The commission will use its rulemaking authority to identify event contracts that will (and will not) be subject to the commission's review or prohibitive authority as prescribed under the CEA.[13]
Chairman Selig stated that he has directed CFTC staff to develop rules to enable the "responsible deployment of additional forms of eligible tokenized collateral."[14]
The announcement follows recent steps by the commission to enable FCMs and intermediaries to hold and custody customer collateral in the form of virtual currencies, such as bitcoin and ether, as well as stablecoins.[15]
Chairman Selig noted that onshoring perpetual derivatives markets and platforms are a "priority," describing them as important from a risk management and price discovery standpoint.
The chair stopped short of promising a rulemaking for onshoring perpetuals (or "perps"), suggesting that the agency may look to deploy its existing regulatory toolset to enable US person customers to access perps offered by foreign platforms or issuers. Chairman Selig did refer to perpetuals as "futures," indicating the commission may take a more flexible approach to product classification that could free up differing pathways for market entry and foreign comparability. In April 2025, CFTC staff announced a comment period on perpetual contracts during which it invited input to inform the CFTC on the uses, benefits, and risks of perpetual contracts.[16]
Takeaways
We expect the CFTC and SEC to look for ways to allow for more alternative or domestic substituted compliance approaches as between the agencies and their regulatory regimes with respect to Project Crypto, but also in prediction and traditional markets. In prediction markets, we believe the CFTC and SEC could consider reducing duplicative registrations (e.g., DCM and NSE) for event contract platforms seeking to offer swaps or security-based swap agreements and security-based swaps, including potential notice registration.
With respect to digital asset markets, Chairman Selig's remarks that market participants accessing a single platform should be able to do so "without navigating an inefficient patchwork of registrations" suggests the CFTC may ultimately look to accommodate vertically integrated market structures more commonly seen in digital commodity markets.
Registrant and applicant event contract platforms, sportsbooks, and other prediction market participants should strongly consider advocacy efforts with the Chair's Office and CFTC Staff prior to the release of a notice of proposed rulemaking. The CFTC will continue to be receptive to meeting with crypto market participants and prediction market participants to advance product development and innovation prior to formal rulemaking or regulation.
Firms that previously submitted comment letters in response to the event contract’s 2024 notice of proposed rulemaking should strongly consider resubmitting—and possibly updating and revising their comment letters prior to doing so. Issues to consider commenting on include product classification, the regulation of intermediaries (e.g., as part of a fully collateralized contract offering), BSA / AML requirements and diligence, and the Commission’s efforts to enhance certainty with respect to its 40.11 permissive authority.
[1] Chairman of the Securities and Exchange Commission Paul S. Atkins, The SEC's Approach to Digital Assets: Inside 'Project Crypto' (Nov. 12, 2025) https://www.sec.gov/newsroom/speeches-statements/atkins-111225-secs-approach-digital-assets-inside-project-crypto.
[2] Chairman of the Commodity Futures Trading Commission Michael Selig, The Next Phase of Project Crypto: Unleashing Innovation for the New Frontier of Finance (Jan. 29, 2026). https://www.cftc.gov/PressRoom/SpeechesTestimony/opaselig1.
[3] Id.
[4] See generally 77 Fed. Reg. 48208 (Aug. 13, 2012).
[5] See, e.g., Plaintiff Commodity Futures Trading Commission’s Response to Amicus Brief by Securities and Exchange Commission, Commodity Futures Trading Commission v. Archegos Capital Management, LP et al., 22-CV-3401, ECF No. 79 (Apr. 28, 2023); see also Ryan Hayden, SEC Amicus Filing Proves Unfriendly to CFTC: Court Establishes Jurisdictional Clarity for Select Title VII Products (Nov. 30, 2023) https://www.steptoe.com/en/news-publications/sec-amicus-filing-proves-unfriendly-to-cftc-court-establishes-jurisdictional-clarity-for-select-title-vii-products.html.
[6] Commodity Exchange Act § 2(C)(2)(D).
[7] Bitnomial became the first DCM to self-certify “2(C)(2)(D)” contracts with the CFTC in December 2025.
[8] For example, when asked about permissibility of listing sports events contracts through the CFTC, Selig deferred to court decisions in pending litigation. Nomination of Michael Selig to be Chairman and Commissioner of the Commodity Futures Trading Commission S. Hrg. 119-214 (Nov. 19, 2025) (“[T]his is a really complicated issue. It is an interpretive question that is working its way through the courts, and so I will respect the decisions of those courts. I also am very interested to work with this Committee to the extent that there are views that we need to change anything in the statute. This is ultimately a question for the courts. As a Chairman of an agency, I will always look to the views of the courts and to Congress. As the Supreme Court has said in the Loper Bright decision, you know, the deference of the agency is limited. We have to look to the courts.”).
[9] 89 Fed. Reg. 48968 (June 10, 2024). See also Ryan Hayden, Alexandra C. Scheibe, Proposed CFTC Event Contract Rule Creates Uncertainty, Could Stifle Markets with Consequential Commercial Value (June 13, 2024) https://www.steptoe.com/en/news-publications/Proposed-CFTC-Event-Contract-Rule-Creates-Uncertainty-Could-Stifle-Markets-with-Consequential-Commercial-Value.html.
[10] 85 Fed. Reg. 11,596, 11,597 n.15 (Feb. 27, 2020).
[11] Certain Contract Markets, CFTC Letter No. 25-36 (Sep. 30, 2025) https://www.cftc.gov/csl/25-36/download.
[12] Chairman of the Commodity Futures Trading Commission Michael Selig, The Next Phase of Project Crypto: Unleashing Innovation for the New Frontier of Finance.
[13] Commodity Exchange Act § 5c(c)(5)(C).
[14] Chairman of the Commodity Futures Trading Commission Michael Selig, The Next Phase of Project Crypto: Unleashing Innovation for the New Frontier of Finance.
[15] Acting Chairman Pham Announces Launch of Digital Assets Pilot Program for Tokenized Collateral in Derivatives Markets (Dec. 8, 2025) https://www.cftc.gov/PressRoom/PressReleases/9146-25.
[16] CFTC Staff Seek Public Comment Regarding Perpetual Contracts in Derivatives Markets (Apr. 21, 2025) https://www.cftc.gov/PressRoom/PressReleases/9069-25.
