US Senator Elizabeth Warren has issued a letter to Commodity Futures Trading Commission (CFTC) Chairman Michael Selig, questioning the Commission’s ability to properly regulate prediction markets and cryptocurrency firms.
“I write with deep concern regarding the CFTC’s inability to function as an effective regulator of prediction markets and cryptocurrencies. According to recent reports, the agency has been ‘steamrolled’ by prediction market ventures and crypto firms – industries the agency helps oversee, and in which President Trump and his family hold significant financial investments,” Warren said.
“As prediction markets balloon in size, and Congress advances legislation that threatens to loosen the guardrails on cryptocurrency, the CFTC’s reported capture by industry poses severe risks to American families and our economy. I therefore request additional information to better understand the agency’s ability to protect American investors and markets amidst unprecedented presidential corruption.”
The Massachusetts Senator requested a record of communications between the CFTC and prediction market entities, as well as a list of staff members who were placed on leave after “doing their jobs” to oversee prediction market and cryptocurrency organizations.
Warren continued: “A CFTC with fewer staff members, reduced enforcement activity and expanded responsibilities is a recipe for disaster. It leaves the public even more vulnerable to bad actors and our financial system even more fragile.
“Even prior to the Trump Administration’s efforts to weaken the agency, the CFTC was not equipped to regulate prediction markets that resemble gambling. The CFTC’s recent policy decisions and management present significant concerns that must be addressed, particularly before the agency is assigned any additional responsibilities over markets where there have been indications of corrupt industry and political influence.”
Warren highlighted how the CFTC has reduced its workforce by approximately 25%, accompanied by a “steep decline” in enforcement action from the Commission since President Trump took office.
In May, the American Gaming Association (AGA) told Congress that the CFTC is moving beyond its intended remit by allowing sports-related prediction markets to operate under federal derivatives rules.
AGA CEO Bill Miller gave evidence to the Senate Subcommittee on Consumer Protection, Technology and Data Privacy during a hearing focused on whether platforms offering sports event contracts should be treated as financial exchanges or gambling operators.
The NHL and CFTC signed a memorandum of understanding on May 21 to ‘protect the integrity’ of professional hockey and ‘maintain fair and transparent’ prediction markets
