Administrative Law

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On September 15, 2026, the Senate fell four votes short of the 60 needed to advance the Digital Asset Market Clarity Act (the CLARITY Act). Within 48 hours, the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC) both took steps to regulate digital assets using the authority they already have. The message for companies in this space is simple: without new legislation from Congress, the agencies plan to build the rules for digital asset markets themselves.

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On September 28, 2026, the Commodity Futures Trading Commission (the CFTC or Commission) submitted two proposed rules to the White House Office of Information and Regulatory Affairs (OIRA) that would further define the term “swap” under the Commodity Exchange Act to resolve the question of whether event contracts traded on prediction market platforms fall within the CFTC’s exclusive jurisdiction.

On October 9, 2026, following OIRA review, the CFTC published both rules. The first, an Interim Final Rule (IFR) excluding casino-style gambling products from the swap definition, took effect immediately upon publication. The second, a Notice of Proposed Rulemaking (NPRM) that would further define “swap” to include event contracts, was published for public comment. The filings are the latest step in the CFTC’s broader strategy of using its existing statutory authority to settle regulatory questions that Congress has so far left unresolved, and they arrive as state regulators, federal courts, and now potentially the Supreme Court continue to contest who has the final say over prediction markets.

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On September 24, 2026, the Federal Reserve Board requested public comment on two proposed rules implementing the Fed’s responsibilities under the GENIUS Act, establishing a regulatory framework for Board-supervised payment stablecoin issuers. The GENIUS Act, enacted in July 2025, established the first federal regulatory framework for dollar-backed cryptocurrency tokens known as stablecoins. For banks and bank holding companies evaluating whether to enter the stablecoin market, the proposals may be among the clearest signals yet of the operational, capital, and application requirements they could face.

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On August 25, 2026, the U.S. Court of Appeals for the Ninth Circuit issued a consequential opinion on the enforceability of “materiality conditions” in government contracts. The Ninth Circuit found that the U.S. Departments of Transportation (DOT) and Housing and Urban Development (HUD) likely stepped beyond their statutory authority by requiring grant recipients to certify, after the point of award, that compliance with certain laws was “material” to the agencies’ payment decisions, for purposes of False Claims Act (FCA) liability. While limited to the laws at issue, the opinion is significant in recognizing that the Government cannot lower its burden of proving FCA materiality through post hoc certifications imposed on government contractors.

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For the past year, the regulatory fight over prediction markets has been waged primarily between two camps: the U.S. Commodity Futures Trading Commission (CFTC), which asserts exclusive federal jurisdiction over event contracts as regulated derivatives, and a growing number of states that characterize sports-linked event contracts as unlicensed sports betting. Recent developments have added a new dimension that operators and their distribution partners should be tracking closely. In recent weeks, a major U.S. city and thousands of individual consumers have raised legal claims that do not depend on resolving the federal-preemption question. Baltimore has sued Kalshi and Polymarket under its municipal consumer protection ordinance, the New York City Council has launched an investigation into the industry’s marketing practices, and a wave of consolidated consumer class actions is advancing through federal court.

Each of these actions proceeds on legal theories that are largely independent of the CFTC’s exclusive-jurisdiction dispute—and each raises distinct strategic considerations for the companies involved.

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On August 20, 2026, Commodity Futures Trading Commission (CFTC) Chairman Michael S. Selig used the inaugural meeting of the agency’s Innovation Advisory Committee (IAC) to outline the agency’s plans to develop a regulatory framework for crypto asset markets using existing CFTC authority, independent of the Digital Asset Market CLARITY Act. In prepared remarks delivered at CFTC headquarters, Chairman Selig confirmed that he has “directed the CFTC staff to begin exploring rules to codify a CFTC market structure for crypto assets using the agency’s existing authorities.”

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Prediction markets allow their participants to trade event contracts based on binary outcomes of future events, ranging from the outcome of an NFL playoff game to how many times the Vice President will clap during the State of the Union. The price of these contracts (for example, a 30-cent event contract may pay $1 if the event occurs) reflects the market’s assessment of the probability that a given outcome will occur.

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States continue to lead the way in actions to enforce consumer protection laws against junk fees across a growing range of industries. In a recent Husch Blackwell Government Enforcement Investigation and Compliance webinar, that included its Antitrust & Competition group, the Texas AG’s cases against junk fees charged by major hotel and booking chains were highlighted and broader state and federal junk fee initiatives were summarized. Since then, two significant new state developments have concentrated attention on junk fees.

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In a rare exercise of federal emergency authority, on July 14, 2026, the Commodity Futures Trading Commission (CFTC) did two things that, individually, would each be unusual and together are noteworthy: it stayed an emergency rule self-filed by a regulated exchange, and then affirmatively ordered that exchange to honor contracts it had already proposed to unwind. The target was KalshiEX LLC (Kalshi), a CFTC-designated contract market (DCM) for event contracts. The catalyst was a Michigan state court order that the CFTC determined raised questions of federal preemption under the Commodity Exchange Act (CEA) and the functioning of a federally regulated derivatives market.