US SEC and CFTC submit proposed rules on crypto assets and prediction markets to the White House, formalization talks gather pace

YM Lee

Summary

It reported that the US SEC and CFTC submitted regulatory proposals related to crypto assets and prediction markets to the White House.
It said the SEC submitted guidelines on applying federal securities laws to certain crypto assets and related transactions, which are expected to clarify criteria for classifying them as securities.
It reported that such classification standards are viewed as a key factor affecting the industry broadly, including crypto firms’ registration obligations, disclosure rules, and business operating models.

Forecast Trend Report by Period

Major US financial regulators are stepping up efforts to build a regulatory framework for the crypto-asset (cryptocurrency) industry and prediction markets.

According to a Bloomberg report on the 4th (local time), the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) submitted regulatory proposals related to crypto assets and prediction markets to the White House. This is seen as one of the first formal steps to flesh out digital-asset policy since the Trump administration took office.

The SEC submitted commission-level guidelines on the “application of federal securities laws to certain crypto assets and crypto-asset-related transactions” to the Office of Information and Regulatory Affairs (OIRA), the White House’s regulatory review body. The document is expected to clarify regulatory standards, including which crypto assets are classified as securities.

The SEC said the guidelines “may include discussions related to establishing a token taxonomy.” This could serve as a basis for determining whether a crypto asset is a security or has the characteristics of a derivative, and thus which agency—the SEC or the CFTC—has supervisory authority.

Such classification standards are viewed as a key factor that could affect the industry broadly, including registration requirements for crypto firms, disclosure rules, and business operating models.

Meanwhile, the CFTC also submitted a regulatory proposal related to the prediction-market industry to the White House. Prediction markets refer to contract markets that allow bets on the outcomes of specific events such as election results, sports games, and geopolitical incidents.

CFTC Commissioner Michael Selig said at a recent Milken Institute event that, regarding prediction-market regulation, it has “moved into the advance notice of proposed rulemaking stage.” This is a process to gather industry feedback ahead of formal rulemaking.

Recently, the prediction-market industry has seen transaction volumes surge, centered on sports events, growing into a market worth billions of dollars. However, concerns in Washington are also rising as contracts tied to conflicts in the Middle East, including Iran, have emerged.