The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have respectively submitted regulatory proposals to the White House Office of Information and Regulatory Affairs (OIRA), covering two major topics: the classification system for crypto assets and the development of rules for prediction markets. The SEC proposal is presented as an advisory guidance at the commission level, while the CFTC proposal is submitted as a pre-notification of proposed rules, targeting the formal regulatory framework for the prediction market industry.
SEC Crypto Asset Token Classification Proposal: Core Mechanism Analysis
SEC Chair Paul Atkins stated that the regulatory agency will develop interpretive guidance on the classification of crypto asset tokens to ensure investors and industry participants clearly understand their regulatory obligations. He repeatedly emphasized that digital asset regulation is central to his policy agenda and noted that beyond congressional legislation, the agency has significant autonomy to advance related rulemaking.
The core logic of the token classification system is to establish formal standards for asset categorization:
- Tokens deemed securities: Regulated by the SEC, subject to full registration, disclosure, and compliance obligations.
- Tokens deemed commodities: Under CFTC jurisdiction, applicable to derivatives regulation frameworks.
The commission-level guidance must be approved by a vote of the commissioners, carrying more weight than staff-level statements but not involving a full public comment process, placing it between administrative guidance and formal legislation.
CFTC Prediction Market Proposal: From Acceptance to Formal Regulation
CFTC Chair Michael S. Selig confirmed on Tuesday at an event hosted by the Milken Institute that the proposal submitted to OIRA has evolved into an "Advance Notice of Proposed Rulemaking," equivalent to a policy concept document issued before the agency formally initiates rulemaking procedures, providing a basis for industry feedback on specific rules.
Prediction markets have seen a significant increase in trading volume over the past year, driven mainly by sports events. However, recent event contracts related to the Iran conflict and Middle Eastern geopolitical tensions have attracted close attention from multiple sectors in Washington, prompting discussions on the need for formal regulatory frameworks.
White House Review Mechanism: Structural Shift in Financial Regulation Framework
The submission of proposals by the SEC and CFTC to OIRA reflects a fundamental shift in regulatory processes under the Trump administration. Previously, independent regulators like the SEC and CFTC did not need to submit new rules for White House review; however, in 2025, the Trump administration mandated that all executive agencies—including financial regulators—must follow this process, significantly increasing White House influence over financial regulation agendas.
Meanwhile, legislation aimed at establishing a comprehensive digital asset regulatory framework in Congress stalled earlier this year in the Senate, with disputes centered on whether banks and crypto companies like Coinbase can offer rewards to customers holding stablecoins. Representatives from both sides have recently met at the White House multiple times to seek a compromise.
Frequently Asked Questions
What is the current regulatory basis for prediction markets in the U.S.?
Prediction markets are currently mainly regulated by the CFTC through "Event Contracts." Since the Trump administration took office, regulatory attitudes have become more friendly. The submission of the proposed rules pre-notification by the CFTC marks the official start of establishing a formal regulatory framework for prediction markets.
How will the SEC’s token classification system affect crypto companies?
Once established, the classification system will directly determine whether various crypto assets fall under SEC or CFTC jurisdiction, impacting compliance requirements, disclosure obligations, and business structure design for related companies. For issuers of tokens currently in regulatory gray areas, clear classification standards will provide significant legal certainty.
What is the practical impact of the White House OIRA review mechanism on regulation?
OIRA review is a procedural step before the official announcement of regulatory proposals. Typically, agencies can only release proposals for public comment after completing this review. White House involvement in the review of independent regulators’ rules means the administration has more direct influence over regulatory directions, which could also alter the timing and content of final rule releases.
