The Commodity Futures Trading Commission (CFTC) has come out to defend the federal exclusive jurisdiction over crypto prediction markets like Polymarket.
The company has done this by intervening in the Crypto.com case in Nevada, where regulators are seeking to ratify that future event contracts are regulated financial products and not games of chance that require a regional license. By definition, a future event contract is a simple financial derivative that settles if a particular market (index, product) reaches a “yes or no” condition within a predetermined time.
This technical distinction, protected by the Commodity Exchange Act, is intended to quell legal attacks by states seeking to impose their own gambling laws on platforms with federal oversight.
In an opinion column published on February 16, 2026, the agency’s director, Michael Selig, ditched his usual bureaucratic language to state his position. In it, he warned that the CFTC would no longer be a bystander to state attempts at prohibition. Products considered by authorities to be legitimate risk management tools.
“The CFTC will no longer stand by and watch overzealous state governments undermine our exclusive jurisdiction by seeking to establish bans on these products.”
Michael Selig, CFTC Chairman.
Additionally, on February 5, 2026, the agency filed a motion to grant briefs with the court (friend of the court (or through persons close to the court) to assist Crypto.com (North American Derivatives Exchange) in the United States Court of Appeals for the Ninth Circuit in litigation against Nevada regulators.
Traces of this intervention This is the first time the CFTC has taken direct action in one of about 50 pending state lawsuits against the exchange. and federally registered cryptocurrency platforms.
The crux of the dispute lies in the very nature of these contracts. Although they are classified as games under gambling laws in states such as Nevada, Selig argues they serve an important economic function.
The agency says these markets help farmers protect themselves from temperature fluctuations that can ruin crops, and small business owners protect themselves from higher taxes and higher energy prices. These financial instruments transform unpredictable risks into manageable and predictable costs, improving economic resilience.
Legitimate economic functions through predictive contracts
Temperature changes are extreme events such as frost, drought, heat waves, and excessive rainfall that can damage agricultural production. Also, in agricultural derivatives (futures and options on exchanges such as CME, CBOT, and ICE Futures), farmers sell futures or buy options to set a minimum selling price.
If a weather event causes crop yields to decline and prices to rise due to reduced supply, the production loss will be compensated for by gains on derivatives, stabilizing income.
In that sense, there is Fundamental changes in US regulatory policy. That’s because the new CFTC administration is dismantling barriers put in place by its predecessor, rescinding a 2024 proposal that called for a ban on political and sports contracts and a 2025 staff recommendation that warned of legal risks for states.
Instead, Selig argued that platforms such as Calci, Polymarket, and Coinbase operate under strict federal oversight and do not classify these products as gambling. Mr. Selig, who was appointed president on December 22, 2025, directed his staff to reevaluate their involvement in the litigation to protect their exclusive jurisdiction.
Government agencies prepare new rules to clarify regulatory framework and encourage responsible innovation in the event market that integrates cryptocurrencies and real-world predictions.
As CriptoNoticias recently reported, the CFTC has expanded its Innovation Advisory Board to 35 members, which also includes leaders from Coinbase and Polymarket. The expansion, announced on February 12, 2026, will include Brian Armstrong (CEO of Coinbase), Shayne Coplan (CEO of Polymarket), and other executives from crypto platforms and prediction markets, as well as representatives from traditional finance (such as CME Group and Nasdaq) and academics.
The move strengthens the CFTC’s pro-cryptocurrency approach under Selig. So far, no immediate regulatory changes have been announced. If the committee starts to signal that it will lead to clear standards for these products.