The U.S. Commodity Futures Trading Commission (CFTC) has filed a lawsuit against New York state, which has moved to regulate prediction market companies.
Coindesk reported on April 24 that the CFTC argued in a complaint filed in the U.S. District Court for the Southern District of New York that authority to regulate related derivatives, including prediction market contracts, belongs to it under federal law.
New York sued Coinbase and Gemini this week. It said the companies' prediction market contracts violated the state's gambling law. New York last year demanded that Kalshi stop operating a sports betting platform.
The CFTC is countering that state governments have no authority to intervene in these companies' operations. It said federal law grants it exclusive jurisdiction over regulating commodity futures, options and swaps traded on federally regulated exchanges. It said this includes designated contract markets registered with the CFTC.
CFTC Commissioner Mike Selig has pushed the matter as a key task in the 4 months since taking office. The CFTC previously sued Arizona, Connecticut and Illinois, arguing that event contracts are derivatives under federal jurisdiction.
Chi-gyu Hwang (황치규)
delight@d-today.co.kr