CFTC Launches Innovation Task Force Covering Crypto, AI, and Prediction Markets

The U.S. Commodity Futures Trading Commission (CFTC) on Tuesday announced the formation of an Innovation Task Force aimed at developing clearer regulatory frameworks for crypto assets, artificial intelligence, and prediction markets within U.S. derivatives markets.

“By establishing a clear regulatory framework for innovators building on the new frontier of finance, we can foster responsible innovation at home and ensure American market participants are not left on the sidelines,” Chairman Michael Selig said in a statement.

The unit will operate alongside the CFTC’s Innovation Advisory Committee, which was formed in February and includes more than 30 executives, including Kalshi CEO Tarek Mansour and Nasdaq CEO Adena Friedman.

According to the agency, the task force will concentrate on crypto assets and blockchain technology, artificial intelligence and autonomous systems, and prediction markets and event contracts.

The task force will also coordinate with other federal bodies, most notably the SEC and its Crypto Task Force, as both agencies continue to align their regulatory postures.

Interagency Alignment

The announcement extends a run of coordinated action between the two regulators. Earlier this month, the SEC and CFTC signed a memorandum of understanding formalizing their commitment to jointly oversee the digital asset sector.

That MOU followed the SEC’s March 17 interpretive release — arguably its most consequential crypto guidance to date — which classified 16 major tokens, including BTC, ETH, and SOL, as digital commodities that fall outside the SEC’s jurisdiction and are under the purview of the CFTC. The CFTC said it would administer the Commodity Exchange Act consistently with that framework.

Selig had telegraphed much of this agenda at the Milken Institute on March 3, where he said the CFTC was “modernizing” its rules to accommodate DeFi protocols and on-chain market infrastructure.

Prediction Markets in Focus

The inclusion of prediction markets as a core pillar of the task force underscores the CFTC’s intensifying push to assert federal jurisdiction over the rapidly growing sector. The agency launched a sweeping review of prediction markets on March 12 via an advance notice of proposed rulemaking.

Selig has also taken a combative stance against state gaming regulators that have challenged prediction market platforms, filing a friend-of-the-court brief in February in support of Crypto.com against the Nevada Gaming Control Board and warning that the CFTC “will no longer sit idly by” while states undermine its exclusive jurisdiction.

The momentum has coincided with major commercial developments in the space. Last week, Major League Baseball named Polymarket its exclusive prediction market partner and signed its own information-sharing MOU with the CFTC — a first for a professional sports league and the derivatives regulator.

The task force also arrives days after the CFTC granted no-action relief to Phantom, allowing the self-custodial Solana wallet to connect users to derivatives trading through registered market participants without having to register as a broker.

This article was written with the assistance of AI workflows. All our stories are curated, edited and fact-checked by a human.