The US CFTC Withdraws Ban on Political Event Contracts, Shifting Regulatory Stance Toward Supporting Orderly Innovation in Prediction Markets

The Chairman of the U.S. Commodity Futures Trading Commission (CFTC), Mike Selig, has withdrawn the rule proposal introduced by his predecessor in 2024 that aimed to ban "political event contracts," and has also revoked the previous guidance that caused industry uncertainty.

Selig stated that the new rules will be strictly based on the Commodity Exchange Act, with the core goal of promoting orderly and responsible innovation in the derivatives market.

Compared to the earlier draft, which classified political event contracts alongside war and extreme violence event contracts as "not in the public interest," this has been completely overturned in the new regulation.

This policy shift directly clears key institutional obstacles for the development of the prediction market industry. It not only provides a clearer and more friendly regulatory environment for event prediction platforms represented by Kalshi and Polymarket;

it also paves the way for large traditional financial institutions like Coinbase and the Chicago Board Options Exchange (Cboe) to enter and expand their businesses in this field.

In summary, CFTC’s proactive withdrawal of the controversial proposal and its demonstration of an open attitude toward market innovation mark a new, more pragmatic phase in the landscape of U.S. crypto regulation, emphasizing substantive impact.