CFTC's Selig Pledges End to Regulation by Enforcement in Crypto Markets

Mike Selig, confirmed to lead the U.S. Commodity Futures Trading Commission in December 2025, pledged this week to end "regulation by enforcement" in crypto markets. Selig stated the agency is "not regulating by enforcement and opaque rules," marking a shift from what he described as a "decelerationist" approach that forced American innovators offshore. The stance aligns with a broader pivot in Washington, where the CFTC and Securities and Exchange Commission issued a joint statement clarifying how federal securities laws apply to crypto assets.

Selig Holds Sole CFTC Commissioner Authority

Selig is the CFTC's only sitting commissioner, concentrating regulatory decision-making power over crypto assets, prediction markets and derivatives. The authority is normally divided among a five-member commission. Senator Elizabeth Warren questioned the agency's ability to police prediction markets and crypto under this structure, raising concerns about industry capture. Selig argued for the CFTC's exclusive regulatory authority over prediction markets, resisting efforts by individual states to assert control.

CFTC Advances Perpetual Futures and Prediction Market Rules

The CFTC cleared the first U.S.-regulated crypto perpetual futures contract under Selig's leadership, lifting Hyperliquid's HYPE token to a record near $67. Selig stated the agency will craft rules letting U.S. investors trade perpetual futures domestically rather than on offshore exchanges. On June 10, the CFTC published a proposed rule for prediction markets applying a 90-day review and a public-interest test to event contracts. Most sports contracts would be permitted, while war, terrorism and assassination markets remain candidates for prohibition. Prediction markets hit $36.6 billion in trading volume in the first quarter of 2026, overtaking gambling for the first time. President Donald Trump defended prediction markets and bitcoin in a Truth Social post praising Selig.

FAQ

What did Mike Selig pledge regarding CFTC crypto regulation? Selig pledged to end "regulation by enforcement" and stated the agency is "not regulating by enforcement and opaque rules." He was confirmed to lead the CFTC in December 2025.

What prediction market rule did the CFTC propose in June 2026? On June 10, the CFTC published a proposed rule applying a 90-day review and a public-interest test to event contracts. Most sports contracts would be permitted, while war, terrorism and assassination markets remain candidates for prohibition.

How much trading volume did prediction markets reach in Q1 2026? Prediction markets hit $36.6 billion in trading volume in the first quarter of 2026, overtaking gambling for the first time.