U.S. CFTC withdraws draft ban on political event contracts, indicating a shift in market regulation stance

2026-02-05 00:10:01

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Odaily Planet Daily News: The Chairman of the U.S. Commodity Futures Trading Commission (CFTC), Mike Selig, announced on Wednesday that the agency is officially withdrawing the proposed “Event Contract” regulation draft for 2024 and revoking a related guidance issued during the Biden administration. The draft originally aimed to prohibit prediction contracts based on political event outcomes and treat them the same as contracts related to war, terrorism, and other “against public interest” activities.

Selig stated that the 2024 proposal reflects the previous administration’s “overreach in value judgment-based regulation,” and that the CFTC will reintroduce a new set of rules based on the Commodity Exchange Act (CEA), which are more consistent and rational, to support responsible innovation in the derivatives market and align with Congress’s legislative intent.

This policy adjustment provides a clearer regulatory signal for prediction markets. Previously, the CFTC lost a lawsuit against Kalshi and was forced to allow the launch of political prediction contracts. With the new administration in office, institutions including Coinbase and Cboe are actively expanding their prediction market-related businesses. The withdrawal of the old regulation is seen as a significant turning point in the regulation direction of the U.S. prediction market. (CoinDesk)

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