Crypto News
The Securities and Exchange Commission has signaled a coordinated pause on a wave of prediction-market exchange-traded fund filings, with Chair Paul Atkins confirming that several fund sponsors have voluntarily delayed their event-contract products while the regulator seeks broader public input. Roundhill Investments, GraniteShares, and Bitwise’s PredictionShares brand are among the issuers that have submitted roughly two dozen such proposals since February, each designed to package binary outcomes on elections, recessions, and sports results into brokerage-ready wrappers. Atkins framed the deferral as a procedural step rather than an outright rejection, echoing the structural template that earlier brought spot Bitcoin ETFs into mainstream investor portfolios and emphasizing that staff want to evaluate a category growing faster than its rulebook.
In parallel, the Commodity Futures Trading Commission and the National Hockey League formalized a memorandum of understanding aimed at policing event contracts tied to professional hockey. Designated representatives from both sides will share data confidentially and coordinate on integrity monitoring. NHL Commissioner Gary Bettman backed the arrangement, framing it as an enhancement to the league’s existing oversight systems, which already include licensing arrangements with Kalshi and Polymarket for hockey settlement feeds. CFTC Chair Mike Selig previously signed a comparable agreement with Major League Baseball in March, signaling that derivatives regulators view sports-tied prediction markets as a category requiring league-level coordination and structured surveillance rather than ad hoc enforcement actions taken after the fact.
Across the courtroom this week, Galaxy Digital and BitGo opened oral arguments over the collapse of their once-$1.2 billion merger, with the dispute reaching its fourth year since the deal was first announced. BitGo is pressing Galaxy, led by founder and chief executive Michael Novogratz, for at least $100 million in damages over what it characterizes as a deliberate retreat from a binding transaction. The custodian alleges that Galaxy failed to use reasonable efforts to close and concealed details of U.S. regulatory probes that would have materially affected the merger’s viability. Galaxy terminated the acquisition in August 2022, asserting it was not contractually obligated to pay a termination fee.
At the center of Galaxy’s defense is BitGo’s failure to deliver audited 2021 financial statements by the July 31, 2022 contractual deadline. Galaxy maintains that the missed milestone gave it grounds to walk without penalty, while BitGo counters that Galaxy’s wider motivations were shaped by deteriorating market conditions during the bear market and by undisclosed regulatory pressure. The disagreement underscores how heavily mergers and acquisitions in digital assets depend on timely audited disclosures, a requirement that even large, well-capitalized counterparties have struggled to satisfy during periods of acute market stress and rapidly shifting compliance expectations.
When Galaxy first unveiled the acquisition in May 2021, BitGo co-founder Mike Belshe was set to become deputy chief executive of the combined entity and join its board, a structure that would have placed institutional custody at the core of Galaxy’s diversified blockchain platform. The transaction’s collapse left both firms to pursue independent strategies through the prolonged downturn that followed, with BitGo expanding its qualified custody business across spot and derivative products, and Galaxy refocusing on trading, asset management, mining infrastructure, and venture investments tied to the broader crypto stack.
BitGo has maintained since 2022 that it would either secure the $100 million termination fee or pursue damages exceeding that figure through litigation, a posture that has now translated into open court proceedings. Industry observers are watching closely because a finding in BitGo’s favor would set an important precedent for break-fee enforcement in crypto mergers, where deals across both DeFi and centralized infrastructure have frequently unraveled amid shifting regulatory and market conditions. With deal activity reaccelerating in 2026, both sides understand that the ruling could shape how future acquirers structure contingencies, fee triggers, and disclosure obligations in digital-asset transactions.
Taken together, these developments illustrate how American oversight of digital assets is consolidating around process rather than prohibition. Federal regulators are leaning on structured consultation, league-level coordination, and enforceable contractual standards to bring discipline to an industry that, in earlier cycles, often outran the institutions tasked with policing it. The prediction-market deferrals and the high-stakes Galaxy-BitGo litigation are dissimilar on the surface, yet both reflect the same maturing dynamic: a market in which spot altcoin products, custodial infrastructure, and event-contract wrappers are increasingly judged by the same standards of disclosure, integrity, and judicial precedent that govern legacy finance.
Source: https://en.coinotag.com/us-regulators-pause-prediction-market-etfs-galaxy-bitgo-100m-court-fight
