- SEC Chair Paul Atkins recognized prediction markets as a serious regulatory precedence as a consequence of “overlapping jurisdiction” between the SEC and the CFTC.
- Atkins asserted the SEC already has the authority to control these contracts, stating {that a} product stays a safety no matter its format or how it’s described.
- The regulatory focus comes as platforms like Kalshi and Polymarket face each speedy progress and authorized challenges from states claiming they violate playing legal guidelines.
SEC Chair Paul Atkins informed the Senate Banking Committee on Thursday that prediction markets have turn into a serious regulatory precedence and will fall underneath each SEC and Commodity Futures Buying and selling Fee oversight.
In response to a query from Sen. Dave McCormick (R-PA), Atkins stated the fast-growing sector raises “overlapping jurisdiction” points, and that he and CFTC Chair Michael Selig are working to align their strategy.
Prediction markets are precisely one factor the place there’s overlapping jurisdiction doubtlessly. That may be a enormous concern we’re targeted on.
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SEC Might Step In Quickly
Whereas prediction markets have largely been handled as a CFTC matter to this point, Atkins signaled the SEC could step in quickly, relying on how particular contracts are structured and described.
It’s largely, no less than at present, on the CFTC facet. However we should be harmonized in the best way we’re addressing these markets.
Paul Atkins, SEC Chair. When requested by Sen. McCormick whether or not the SEC would wish new laws to control prediction markets, Atkins stated he believes the company already has authority, arguing that if a product meets the authorized definition of a safety, it stays a safety whatever the format:
I believe we have now sufficient authority. A safety is a safety no matter how it’s, and a few of the nuance with prediction markets and the merchandise depends upon wording and what precisely is being achieved.
Paul Atkins, SEC Chair. The regulatory debate is intensifying as platforms resembling Kalshi and Polymarket have expanded quickly, particularly after the 2024 election cycle. Operators typically argue that occasion contracts are derivatives completely regulated on the federal degree by the CFTC underneath the Commodity Alternate Act.
On the identical time, some states are suing or threatening motion towards Kalshi and Polymarket, claiming sure choices, particularly sports-related contracts, violate state playing legal guidelines.
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