Trump backs CFTC push to expand prediction market authority in U.S.

Traders Union
All News
Crypto News
Trump backs CFTC prediction markets

Highlights

Donald Trump publicly backed CFTC Chair Michael Selig's assertion of exclusive federal authority over prediction markets, amid ongoing lawsuits against five states.
Event-based trading platforms such as Polymarket and Kalshi have rapidly grown during the 2024 U.S. election cycle, intensifying tensions between federal and state regulators over control and legality.
The CFTC faces criticism and political scrutiny following reports of pressured staff departures linked to Trump-backed crypto firms, fueling broader debate on federal oversight of prediction and derivatives markets.

CFTC jurisdiction fight gains political backing

As reported by The Block, Trump voiced support in a Truth Social post for CFTC Chair Michael Selig, whom he appointed to lead the derivatives regulator. Trump said the agency's exclusive authority over prediction markets must be preserved so the sector can continue to develop.

Over the past year, Selig has argued that the CFTC has exclusive jurisdiction over the expanding prediction market industry. The agency is suing five states, Wisconsin, Illinois, Arizona, Connecticut and New York, while also pursuing rulemaking and asserting that existing statute gives it broad authority despite objections from states that say some platforms may violate local gaming and gambling laws, especially in sports-related betting.

Platforms such as Polymarket and Kalshi have surged in popularity in recent years, particularly after the 2024 U.S. presidential election cycle. The regulatory dispute now sits at the intersection of derivatives oversight, state enforcement powers and the rapid growth of event-based trading products.

Crypto link and scrutiny of agency conduct

Trump also used the post to reaffirm support for the cryptocurrency industry, describing it as a major industry and arguing that other countries are competing for leadership in both financial market innovation and digital assets. He said the U.S. wants to remain at the top and does not intend to cede its position in crypto, including Bitcoin.

The political backing comes as the agency faces fresh scrutiny over its handling of firms tied to the sector. A New York Times investigative report published over the weekend said career officials who raised concerns about Polymarket, Crypto.com and other companies with business ties to the Trump family were pushed out of the CFTC.

After that report, Senator Richard Blumenthal of Connecticut said on X that the regulator has become a tool of prediction markets and crypto firms, accusing it of ignoring national security risks while pressuring state regulators and retaliating against staff who were trying to enforce the law. The clash adds to the wider debate over how federal oversight of prediction markets could reshape regulation across derivatives, sports-related contracts and crypto-linked platforms.

Kalshi prediction-market pricing has been signaling rising labor-market anxiety, with traders assigning elevated odds that U.S. unemployment could climb sharply before 2030. Our earlier coverage also noted that AI-driven layoffs are increasingly being priced into these contracts, reflecting concerns that technology-led displacement could intensify even if near-term recession odds remain relatively low.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.