The U.S. Commodity Futures Trading Commission (CFTC) is preparing to release new regulatory guidance and begin a formal rulemaking process that would allow exchanges to self-certify blockchain-based prediction market contracts, according to remarks from CFTC Chair Mike Selig.
The move is expected to provide clearer regulatory standards for event-based derivative contracts—commonly referred to as prediction markets—which allow traders to speculate on outcomes ranging from economic data releases to political events and sports results.
New Guidance for Event-Based Contracts
Selig said the CFTC plans to publish guidance outlining how prediction market contracts can be listed and traded on federally regulated exchanges. The agency will also initiate a formal rulemaking process to establish long-term oversight for these markets.
The guidance is expected to clarify how exchanges can use the self-certification process, a regulatory mechanism that allows a designated contract market to list new derivative products after confirming they comply with the Commodity Exchange Act (CEA) and relevant CFTC rules.
Under this framework, exchanges would submit documentation asserting that their event-based contracts meet regulatory standards, while the CFTC retains the authority to review or suspend them if necessary.
Growing Role of Prediction Markets
Prediction markets have gained momentum in recent years as platforms leveraging blockchain technology and decentralized finance explore new ways to create event-contingent derivatives.
Platforms such as Kalshi and other exchanges have experimented with contracts linked to political elections, sports results, and economic indicators. These contracts typically function as binary options where traders bet on whether an event will occur.
Supporters argue that prediction markets can generate accurate crowd-sourced forecasts, while critics warn that some products resemble online betting and may fall under gambling laws.
Jurisdictional Debate and Legal Challenges
The regulatory status of prediction markets has been a subject of ongoing legal and policy debates in the United States. State regulators and gaming authorities have challenged whether certain event contracts should be regulated as derivatives under federal law or as gambling products under state jurisdiction.
The CFTC has asserted that event-based derivatives traded on regulated exchanges fall under federal oversight, though courts and state authorities continue to dispute that interpretation in some cases.
Selig has stated that the agency intends to provide clear standards for event contracts, arguing that market participants need greater certainty as the sector expands.
Shift Toward a More Structured Framework
The upcoming guidance follows a broader shift in regulatory strategy at the CFTC. Earlier in 2026, the agency withdrew a previous rule proposal that would have restricted certain political and sports event contracts, signaling a more flexible approach toward innovation in prediction markets.
Instead of imposing broad prohibitions, the CFTC now appears focused on establishing a principles-based frameworkthat allows exchanges to introduce new products while maintaining oversight and risk controls.
Implications for Crypto and Blockchain Platforms
The new regulatory direction could be particularly significant for blockchain-based prediction markets, which have expanded rapidly as decentralized applications experiment with event-based financial contracts.
If finalized, the rulemaking could open the door for exchanges to launch tokenized prediction contracts tied to real-world outcomes, while ensuring those products operate within a regulated derivatives framework.
Industry observers say the upcoming guidance may also shape how the United States positions itself in the global race to regulate emerging financial technologies such as decentralized finance and blockchain-based derivatives.
What Comes Next
The CFTC is expected to release its initial guidance and advance notice of proposed rulemaking outlining potential regulatory standards for prediction markets.
Following the proposal, regulators will likely open a public comment period, allowing exchanges, crypto companies, and legal experts to provide feedback before final rules are adopted.
As prediction markets continue to expand across traditional and decentralized finance platforms, the CFTC’s upcoming framework could play a critical role in determining how these markets operate within the U.S. financial regulatory system.
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