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SEC Chair Paul Atkins called prediction markets a major regulatory issue.
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Oversight overlaps between the SEC and CFTC.
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States and federal regulators remain divided on jurisdiction.
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Stablecoin yield debates continue to complicate crypto legislation.
Regulatory Spotlight Intensifies
SEC Chair Paul Atkins told lawmakers that prediction markets are a “huge issue” as regulators examine their rapid growth.
Platforms such as Kalshi and Polymarket have expanded significantly, especially following the 2024 election cycle. The key question remains whether these event-based contracts fall under federal derivatives oversight or state gambling laws.
Atkins said prediction markets mostly fall under the Commodity Futures Trading Commission’s jurisdiction, though coordination between agencies is ongoing.
Jurisdiction and Legislative Tensions
The SEC and CFTC are collaborating through “Project Crypto,” an initiative aimed at modernizing digital asset regulation. However, lawmakers remain divided over stablecoin provisions in broader crypto legislation.
Debates continue over whether crypto platforms should be allowed to offer yield on stablecoins. Banking groups oppose such rewards, arguing they could draw deposits away from traditional institutions.
Atkins emphasized that a security remains a security regardless of technology. Meanwhile, CFTC Chair Michael Selig stated regulators aim to create clear rules that allow prediction markets to flourish within U.S. borders.
