CFTC Chair Unleashes Innovation Panel to Tackle Crypto and Prediction Markets
Regulators finally get a crypto clue—or at least a committee.
The U.S. Commodity Futures Trading Commission is spinning up a new advisory panel. Its mission? To untangle the regulatory knots around digital assets and prediction markets. Chair Rostin Behnam is calling it the Technology Advisory Committee. Because nothing says 'innovation' like a government subcommittee.
Why This Matters Now
The move signals a shift from reactive enforcement to (attempted) proactive engagement. The CFTC's turf war with the SEC over crypto jurisdiction is the stuff of legend. This panel could be Behnam's play to carve out a clearer, more innovation-friendly lane for his agency. Think of it as regulatory jockeying, but with more flowcharts.
Prediction Markets in the Crosshairs
It's not just Bitcoin and Ethereum on the docket. The panel will also scrutinize event-based prediction markets—platforms that let users bet on everything from election outcomes to box office numbers. These have long existed in a legal gray area, often lumped in with gambling. The CFTC's interest suggests they see something more: a potential new asset class, or at least a thorny new problem to solve.
The Innovation Double-Bind
Here's the regulatory conundrum: move too fast, and you risk enabling the next FTX-level blowup. Move too slow, and you strangle legitimate innovation in its crib—pushing development offshore to less scrupulous jurisdictions. This panel is the bureaucratic equivalent of dipping a toe in the water. Whether it leads to a coherent policy or just more meeting minutes remains to be seen.
A Cynical Take from Finance
Let's be real. Wall Street veterans have seen this movie before. A new technology emerges, regulators form a 'task force,' they hold hearings, publish a dense report, and the real rulemaking gets bogged down for years. By the time any framework is finalized, the tech has evolved three times over. It's the regulatory lag—the eternal, costly gap between disruption and governance.
The bottom line? The creation of this panel is an admission. An admission that the old rulebooks are obsolete. Whether it becomes a catalyst for smart policy or just another talking shop is the multi-billion-dollar question. For the crypto industry, it's a signal to engage—or get steamrolled by a process you ignored.
Key figures drive innovation in the team
Recently, the U.S. Senate confirmed two of President Donald Trump’s appointments to lead major U.S. financial regulatory agencies. Selig will chair the CFTC, while Travis Hill will head the Federal Deposit Insurance Corporation. The Senate also approved dozens of other nominees in a 53–43 vote.
With Selig at the helm, the CFTC is expected to become a leading regulator of U.S. cryptocurrency activity once Congress finalizes legislation granting the agency expanded authority. He succeeds Acting Chairman Caroline Pham, who had introduced a series of pro-crypto policies during her tenure.
The Innovation Advisory Committee is being established and will be led by the CEO of the Innovation Council. Selig plans to ask members of that council to be the first members of the new committee.
The CEO Innovation Council comprises leaders from major financial and technology companies. It includes individuals such as Tyler Winklevoss, who leads the cryptocurrency firm Gemini; Shayne Coplan, who runs the prediction market platform Polymarket; Tarek Mansour from the prediction market company Kalshi; and Adena Friedman, who heads the renowned stock exchange Nasdaq.
These leaders work with both new digital tools and old financial systems. Their experience can help the CFTC develop effective rules for the future.
The Innovation Advisory Committee will comprise experts from diverse backgrounds — not just large companies, but also university professors, technology researchers, regulators, and groups representing everyday market users.
Selig wants the committee to help the CFTC determine how new technology affects markets and what rules should look like so that people can trade safely. He said the new committee is important because technologies like blockchain and AI are creating numerous changes.
CFTC tracks cryptocurrencies and prediction markets as trading grows
Two of the big areas people are watching right now are cryptocurrencies and prediction markets.
Cryptocurrencies utilize specialized computer networks known as blockchains. Many people trade cryptocurrencies like bitcoin and Ethereum, and some companies try to build markets for them. Because these markets are new, some people are unsure how the rules should work – and that is one reason the CFTC is focusing on this area.
Not long ago, the CFTC allowed the first regulated exchange to list something called spot crypto products, which means that people can trade real cryptocurrencies on official U.S. markets.
A prediction market enables individuals to make predictions about future events – such as who will win an election or whether a specific event will occur by a certain date. People can place bets on these outcomes and get money if their guess comes true.
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