On 20 August 2026, CFTC Chairman Michael S. Selig delivered remarks at the inaugural meeting of the Innovation Advisory Committee.1 He set out a regulatory agenda he calls the Roadmap for the New Frontier of Finance. The Roadmap covers three areas. The first is crypto asset market structure. Selig confirmed the CFTC stands ready to implement the CLARITY Act if passed. He also directed staff to explore rules for a crypto market structure under existing authority. The second is compute markets, developed in partnership with the Department of Commerce. The third is prediction markets, with three rulemaking workstreams. These include amendments to Rule 40.11 defining gaming and public interest criteria. A modernised reporting framework for fully collateralised event contracts is also proposed. Further amendments to Parts 38 and 40 will institute consumer protection requirements. The speech converts the administration's crypto and AI commitments into a concrete CFTC rulemaking programme.
The Historical Argument For Exclusive Jurisdiction
Selig grounded the Roadmap in the Commission's founding. He recounted that before the Commodity Futures Trading Commission Act of 1974, federal law covered only enumerated agricultural commodities, leaving the balance of contracts to "the same patchwork of state laws that had prompted Congress to institute federal commodity laws in the first place".1 He recalled that early futures exchanges faced state anti-gaming and anti-bucket shop laws, quoting a lawmaker of the era who declared that "[t]he grain gamblers have made the exchange building in Chicago the world's greatest gambling house".1
Congress's answer, he noted, was exclusive federal jurisdiction under section 2(a)(1)(A) of the Commodity Exchange Act, a statutory mandate to promote responsible innovation, and a definition of commodity broad enough to include "all goods and articles, . . . and services, rights, and interests" that may be the subject of a derivative contract, expressly including events and contingencies beyond the parties' control.1
The history in the above is not decoration. It is the legal architecture of the prediction markets defence. By framing state gambling law challenges to event contracts as a rerun of the nineteenth century assault on grain futures, resolved by federal preemption in 1974, Selig is previewing the argument the Commission will run in the Kalshi litigation and its successors. The speech's reference to Chairman Philip McBride Johnson's "Name Fixation Syndrome", the fallacy that a sports future should be regulated by whoever regulates sports, is that argument in anecdote form.
Crypto: Clarity First, Existing Authority If Not
Selig described his partnership with SEC Chairman Atkins on Project Crypto to codify a taxonomy distinguishing crypto asset securities from commodities, and stated that "the most important step towards future-proofing this industry is passing this bipartisan bill", referring to the CLARITY Act.1 The Commission stands ready to implement the legislation immediately if passed.
The consequential announcement is the fallback. Selig stated: "I've directed the CFTC staff to begin exploring rules to codify a CFTC market structure for crypto assets using the agency's existing authorities. This could enable current registrants as well as non-registrant crypto exchanges to be designated by the CFTC as a type of DCM known as a crypto asset market and offer crypto asset trading on a leveraged or margined basis subject to purpose-fit rules under the CFTC's regulatory oversight."1 He added that staff have been directed to engage with developers of onchain finance protocols on legal and compliant pathways for offering protocols in the United States.1
The mechanism in the above rests on the Dodd-Frank provision bringing retail commodity transactions on a leveraged, margined or financed basis within CFTC jurisdiction as futures. A "crypto asset market" category of designated contract market would give spot crypto exchanges a federal registration home without new legislation. Selig was explicit about the conditionality: the Commission will give CLARITY "its breathing room for a vote", but if the bill stalls, which he attributed to "Democratic obstruction", a characterisation this publication attributes and does not adopt, staff will "move swiftly to propose these new rules".1 For exchanges weighing US market entry, the message is that a federal pathway is coming by one route or the other.
Compute: The Commerce Partnership
Selig restated the compute agenda, citing the AI Action Plan's call to improve the financial market for compute and confirming the partnership with the Department of Commerce.1 The request for comment issued on 19 August 2026 is the first step, with stakeholder feedback to inform what he described as a gold standard regulatory framework for these new commodity markets.2 The treatment in the above adds no new mechanics beyond the request for comment, covered separately in this publication, but its placement as the Roadmap's second pillar confirms compute has standing equal to crypto in the Commission's forward agenda.
Prediction Markets: Three Rulemakings
The prediction markets section is the Roadmap's most developed. Selig stated that event contracts are not new, since the statute expressly classifies as commodities occurrences and contingencies beyond the contracting parties' control, but that "the CFTC never instituted a comprehensive regulatory framework to address the unique policy considerations associated with these products".1
The first workstream is the recently proposed amendment to CFTC Rule 40.11. Selig explained that while Congress gave the Commission discretion to prohibit event contracts involving war, terrorism, assassination, gaming and illegal activities where contrary to the public interest, the statute "does not define key terms like 'gaming' or 'involve' or establish public interest criteria", leaving contracts "at risk of rejection based upon arbitrary whims or political biases".1 The proposed amendments would define the key terms and enumerate public interest criteria.
The second is a proposed rule modernising the reporting framework for fully collateralised event contracts.1 The third, expected soon, is a series of amendments to Parts 38 and 40 of the Commission's regulations modernising the core principles and listing rules for DCMs listing event contracts and instituting consumer protection requirements. Selig stated the Commission has "heard the concerns of public commenters about inadequate consumer protections for retail loud and clear", with the amendments also to establish expectations for product governance, market design and incentive programmes.1
The third workstream in the above is the one retail facing platforms should watch most closely. Product governance, market design and incentive programme rules for event contract DCMs would reach the promotional mechanics, contest structures and gamification features that have drawn the sharpest public criticism, and their arrival alongside the jurisdictional defence shows the Commission pairing preemption with substantive standards rather than defending an unregulated field.
Footnotes
- Chairman Michael S. Selig, "Remarks at Innovation Advisory Committee Conference", 20 August 2026, available at www.cftc.gov/PressRoom/SpeechesTestimony.
- Commodity Futures Trading Commission, "Request for Comment on the Listing of Compute Derivatives Contracts", 91 FR 54259, 21 August 2026, RIN 3038-AF77.
- Commodity Exchange Act, 7 USC 2(a)(1)(A) (exclusive jurisdiction), 7 USC 5(b) (responsible innovation mandate), 7 USC 1a(19)(iv) (excluded commodity definition covering occurrences and contingencies), 7 USC 7a-2(c)(5)(C) (special rule for event contracts); CFTC Rule 40.11 and Parts 38 and 40, 17 CFR.
