Commodity Futures Trading Commission Chairman Michael S. Selig wants to run the commission with “minimal” regulation on prediction markets. But getting it might not be that easy.
Selig laid out the future of the agency in an op-ed for the Washington Post on Jan. 20. With bombastic, expansionist language that linked blockchain and prediction markets to homesteaders and Wild West pioneers, Selig said that “the same spirit that drove American farmers to cultivate the Great Plains inspires today’s entrepreneurs to leave traditional finance behind.”
In what Selig calls his “Future-Proof initiative,” he indicated how the Commission will handle prediction markets like Kalshi and Polymarket:
“As new asset classes emerge and the CFTC’s role evolves, guidelines we establish should not just fit the product, but also serve a tailored regulatory purpose. Prediction markets have exploded in popularity as broad swaths of market participants seek to hedge portfolio risks and test their abilities to forecast truth.”
Prediction market free-for-all?
Selig—whom President Donald Trump nominated in October 2025 and was confirmed to the role two months later—wants the CFTC to alter course, turning away from how it acted under President Joe Biden. Selig accused Biden’s CFTC of focusing on “regulation by enforcement,” of having an “aversion to innovation” that drove many prediction markets offshore.
CFTC’s approach should be “to deliver the minimum effective dose of regulation — nothing more and nothing less,” according to Selig. This, he said, meant the “end to policymaking through enforcement.”
Instead, the CFTC will develop “clear rules of the road for market participants that will be codified through notice-and-comment rulemaking to ensure that the regulatory requirements do not change wildly from administration to administration.”
Can a sheriff be the mayor?
Selig’s op-ed wasn’t that revolutionary. After all, he clerked under CFTC Commissioner J. Christopher Giancarlo, aka “Crypto Dad.” And like his mentor, Selig is very crypto-focused.
Selig wasn’t going to come in and start regulating prediction markets. If anything, he’d focus his resources on making America the “crypto capital of the world.” Leaving the CFTC’s prediction market regulation at the bare “minimum” just seems…expected?
But that doesn’t mean it’s now the Wild West. Goodwin attorney Andrew Kim, who has been following the changes to the CFTC, weighed in on Selig’s proposed approach to changing the rules.
“Notice-and-comment rulemaking—even to repeal existing rules to lower the ‘dose of regulation’ to the ‘minimum effective’ level—takes a lot of time. And I have to imagine that such rulemaking will be contentious, at least as to prediction markets,” Kim wrote on X.
Notice-and-Comment Rulemaking is a multi-step process for agencies to create rules. First, the agency issues notice of a proposed rulemaking change; they provide opportunities for public comment for 30-60 days; the agency considers comments and develops the final rule; and then it publishes the final rule.
Kim suggested that there could be “a lack of consensus on what the rules of the road should be” and that tribal gaming organizations will have a lot to say about loosening restrictions on prediction markets.
“Litigation may inevitably drag out the process,” said Kim. “At the end of the day, there’s only so much an agency can do to ‘future-proof’ its policy prerogatives. And ‘future proofing’ requires going through the tedium of the [Administration Procedure Act], and weathering litigation.”
Selig serving solo?
If the CFTC can’t just change the rules, can it decide to simply not enforce them?
Normally, the CFTC consists of five commissioners appointed by the President of the United States. These members serve staggered five-year terms and no more than three commissioners at one time may be from the same political party (meaning, there should always be 3 Republicans/2 Democrats or vice-versa).
There often is a transition at the start of new presidential administrations, with members vacating their seats. In 2024, both Commissioner Christy Goldsmith Romero and Commissioner Summer Mersinger resigned. Commissioner Kristin Johnson left her post the following September, leaving Caroline D. Pham as the sole member and Acting Chairman until Selig’s confirmation in December. Afterward, she resigned to enter the private sector.
All four women were nominated to the CFTC by President Joe Biden, and have yet to be replaced by President Trump. And Trump doesn’t seem to be in a rush to name their replacements.
Thus, there’s really no opposition to Selig’s designs for the CFTC. And he may remain the sole voice in the room for a while: Section 2(a)(3) of the Commodity Exchange Act allows the CFTC to function with only one Commissioner (“a vacancy in the Commission shall not impair the right of the remaining Commissioners to exercise all the powers of the Commission”).
And so, the CFTC’s regulatory power is currently consolidated to one person: Michael Selig.
Selig’s acknowledgment of prediction markets marks a change from previous CFTC iterations, but it seems unlikely that the CFTC will abandon its laissez-faire approach to this industry. Any regulation will likely happen at the state level—or in the courts. Then, the CFTC will be forced to weigh in, a headache that Selig won’t be able to “future-proof” himself from.
