Financial Industry Regulation

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On June 10, 2026, the U.S. Commodity Futures Trading Commission (CFTC) published a Notice of Proposed Rulemaking (NPRM) seeking public comment on amendments to CFTC Regulation 40.11 and the addition of a new Appendix F to part 40, addressing event contracts, commonly traded on so-called “prediction markets.” The proposal would specify which event contracts may be subject to a determination that they are contrary to the public interest, set out the factors the Commission would apply, and add a definition of “gaming” together with a rule for when an event contract “involves” an underlying activity.

Washington, D.C., USA- January13, 2020: Sign of The U.S. Commodity Futures Trading Commission (CFTC) at its headquarters in Washington, an agency of the US government.

Amid recent high-profile incidents of suspicious activity on prediction markets, as well as pressure from Congress, the CFTC has signaled in unmistakable terms that prediction markets are squarely within its enforcement crosshairs and that it will use every tool at its disposal—including artificial intelligence surveillance.

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In April 2026, U.S. Army Special Forces Master Sergeant Gannon Ken Van Dyke was charged for allegedly profiting over $400,000 on bets placed on an offshore cryptocurrency-based prediction platform using classified information related to a military operation targeting former Venezuelan President Nicolás Maduro. The prosecution of Van Dyke reflected the government’s position that prediction markets are subject to the Commodity Exchange Act’s (CEA) anti-fraud and insider trading prohibitions.

Less than six weeks later, federal prosecutors have filed a second insider trading claim involving prediction markets–this time alleging use of confidential corporate data on Polymarket, the world’s largest online prediction marketplace.

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On May 19, 2026, the Commodity Futures Trading Commission’s (CFTC) Division of Enforcement (Division) issued CFTC Letter No. 26-15, a staff advisory establishing a comprehensive new policy on self-reporting, cooperation, and remediation. The policy creates clear incentives for proactive compliance and early disclosure of potential misconduct.

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The prediction market industry has spent the better part of two years arguing that event contracts are a legitimate, regulated, and economically valuable financial product—and, in important respects, that argument has prevailed. What the industry could not have anticipated is that its first landmark enforcement action involves not a rogue trader on Wall Street but an active-duty U.S. Army Special Forces Master Sergeant accused of leveraging classified intelligence about a covert military operation to pocket more than $400,000 on an offshore cryptocurrency-based prediction platform.

The Supreme Court recently and unanimously held in Ellingburg v. United States[1] that restitution imposed under the Mandatory Victims Restitution Act of 1996 (MVRA) qualifies as “criminal punishment” subject to the Constitution’s Ex Post Facto Clause. While this narrow ruling only prohibits restitution judgments for convictions that predate the MVRA, Justice Clarence Thomas authored a concurrence advocating for a more expansive view of the Ex Post Facto Clause that reaches nominally civil as well as criminal laws.

After years of regulatory uncertainty, the SEC and CFTC are moving toward a unified approach to digital asset oversight, launching a joint harmonization initiative to align definitions, streamline compliance, and reduce fragmentation. For crypto and financial services firms, this effort signals clearer pathways for product development and cross‑market operations—though lasting certainty will hinge on sustained…

In white-collar criminal cases, forfeiture is one of the most consequential sentencing components, yet it remains overlooked and misunderstood by practitioners. The U.S. Court of Appeals, Second Circuit’s recent decision in United States v. Ng Chong Hwa demonstrates why a thorough understanding of forfeiture is essential.

2025 has been a landmark year for False Claims Act (FCA) enforcement, marked by record-breaking settlements, evolving legal theories, and a broadening scope of government priorities. The FCA remains one of the federal government’s most potent tools for combating fraud, with billions recovered annually and an ever-expanding reach into new sectors and compliance areas. This roundup synthesizes the year’s most significant developments—drawing on recent case law and shifting enforcement priorities—and provides actionable insights for businesses navigating the FCA landscape.

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2025 marked another notable year in State Attorneys General (AG) enforcement, with both a sharp uptick in multistate AG actions filed against the federal government and significant actions targeting the private sector across industries. We will highlight two issue areas here—antitrust and consumer protection—and describe the escalating friction between State AGs and the federal government as well as distill this year’s trends into actionable takeaways for businesses as we enter 2026.