SEC and CFTC Advance Crypto and Prediction Market Rules, Submitting Plans to White House for Review

The U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission have formally submitted regulatory plans to the White House’s Office of Information and Regulatory Affairs, marking a significant step toward establishing formal oversight frameworks for the crypto industry and prediction markets.

The SEC’s commission-level guidance addresses the “Application of the Federal Securities Laws to Certain Types of Crypto Assets and Certain Transactions Involving Crypto Assets,” potentially establishing a token taxonomy to determine which assets fall under SEC versus CFTC jurisdiction. The CFTC has submitted a measure on prediction markets, moving toward new rules for the multi-billion dollar industry amid growing trading volume driven by sports and geopolitical event contracts.

SEC Advances Crypto Asset Taxonomy Guidance

The SEC’s submission to OIRA represents one of the most concrete regulatory actions under Chairman Paul Atkins’ “Project Crypto” initiative, which aims to replace the previous administration’s enforcement-first approach with clear interpretive guidance. The commission-level guidance, which requires a vote by SEC commissioners, would establish formal categories for different types of crypto assets, determining whether a given token is treated as a security subject to SEC oversight or falls under CFTC jurisdiction.

This distinction carries significant consequences for how crypto firms register, disclose information, and conduct operations. Unlike staff-level statements, commission-level guidance carries more binding authority, though it stops short of a full rulemaking process that involves public notice and comment. The regulator will consider interpretive guidance around token taxonomy to ensure investors and innovators have clear understanding of their regulatory obligations.

The SEC’s Corporation Finance division has been preparing interpretive guidance recommendations aimed at providing clear crypto asset classification and describing frameworks for determining when digital assets constitute investment contracts. For assets deemed investment contracts, the division is developing proposals to establish reasonable regulatory structures for securities issuance and sales.

CFTC Moves Forward with Prediction Market Rulemaking

The CFTC submitted its prediction market measure to OIRA on March 2, 2026, initiating White House review of what Chairman Michael Selig described as an advance notice of proposed rulemaking. The ANPRM serves as a concept release before the agency formally kicks off the official rulemaking process, allowing for public input on potential regulatory approaches.

The agency will write new rules for the prediction market industry, which has seen explosive growth driven largely by sports betting and, more recently, contracts tied to the Iran conflict and broader Middle East developments. The CFTC’s shift represents a dramatic reversal from the previous administration’s approach, with the agency now actively asserting its jurisdiction over event contracts.

The CFTC has established procedures for rulemaking that will need to be followed, including effective dates, compliance dates tied to Federal Register publication, and extended review timelines given the intense interest from multiple industries. The Commission has demonstrated its ability to navigate controversial rulemaking in the past, including the 2010-2012 joint adoption of new product definitions with the SEC, which took two years from notice to final rule.

White House Review Signals Coordinated Regulatory Approach

The submission of both measures to OIRA reflects the Trump administration’s requirement that independent agencies, including financial regulators, submit new rules for White House review. This requirement, announced in 2025, brings SEC and CFTC rulemaking under executive branch oversight, potentially facilitating coordination between the two agencies.

The SEC and CFTC have emphasized their unified approach to digital asset regulation through “Project Crypto,” with both chairs appearing together publicly to highlight coordinated efforts. SEC Chairman Atkins has repeatedly stated that while congressional passage of crypto market structure legislation would be preferable, the agency has significant authorities to move forward on digital asset rules if necessary.

Legislative Context and Industry Implications

The regulatory advancements come as comprehensive crypto market structure legislation remains stalled in the Senate, with disagreements between the banking industry and crypto firms over stablecoin reward programs preventing progress. The Clarity Act, which would provide a formal regulatory framework for digital assets, has been stuck in the Senate Banking Committee since January.

President Trump has weighed in on the dispute, posting on Truth Social that banks need to make a good deal with the crypto industry and that Americans should be able to earn more on their money. The White House has convened multiple meetings between banking and crypto industry representatives in recent weeks to broker a compromise, but no deal has emerged.

For prediction markets, the CFTC’s rulemaking efforts could provide long-sought clarity for platforms such as Kalshi and Polymarket, which have faced jurisdictional disputes with state gambling regulators. Chairman Selig has asserted the CFTC’s exclusive jurisdiction over event contracts as swaps under the Commodity Exchange Act.

The SEC’s token taxonomy guidance, once finalized, would give market participants clear standards for determining which digital assets require SEC registration and which can operate under CFTC oversight, potentially reducing the regulatory uncertainty that has characterized the industry for years.

FAQ: SEC and CFTC Regulatory Plans

What is a token taxonomy and why does it matter?

A token taxonomy would establish formal categories for different types of crypto assets, determining whether a given token is treated as a security under SEC jurisdiction or falls under CFTC oversight as a commodity. This distinction carries significant consequences for how crypto firms register, disclose information, and conduct operations, potentially providing long-sought regulatory clarity.

What is the current status of prediction market regulation?

The CFTC has submitted an advance notice of proposed rulemaking on prediction markets to the White House for review, initiating what could become formal rulemaking establishing standards for event contracts. The move follows Chairman Selig’s assertion of exclusive CFTC jurisdiction over prediction markets and comes amid explosive growth in trading volume driven by sports and geopolitical event contracts.

How does commission-level guidance differ from full rulemaking?

Commission-level guidance requires a vote by SEC commissioners and carries more binding authority than staff-level statements, but stops short of a full rulemaking process that involves public notice and comment. The guidance can provide interpretive clarity while allowing the agency to act more quickly than formal rulemaking, though it may be more easily challenged or reversed by future administrations.