Financial Industry Regulation

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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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Our prior post tracked how the prediction markets fight had expanded beyond the federal preemption dispute between the Commodity Futures Trading Commission and the states into municipal consumer protection ordinances, legislative investigations, and consolidated consumer class actions. A new filing, Farias v. Kalshi Inc., No. 1CCV-26-0001429 (Haw. 1st Cir. Ct. filed Oct. 1, 2026), adds a further theory to that list: rather than asking a court to decide whether sports event contracts are federally regulated derivatives, it asks whether transactions procured through allegedly deceptive legality claims can be voided outright under state consumer protection law.

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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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Federal prosecutors in the Southern District of New York have filed criminal complaints against two former Robinhood Markets, Inc. engineers, alleging they used confidential information about upcoming cryptocurrency listings on Robinhood Crypto to trade profitably on Hyperliquid, an offshore decentralized derivatives exchange. The scheme came to light after Robinhood conducted an internal investigation and referred the matter to law enforcement. The cases illustrate an emerging enforcement priority: prosecutors are extending traditional insider-trading theories to decentralized, unregistered derivatives markets.

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.

On September 11, 2026, the Commodity Futures Trading Commission (CFTC or Commission) approved a final rule adding a new Rule 165.9(d) to the Commission’s whistleblower regulations, creating what the agency calls the “30 Percent Presumption.” Under the presumption, when a whistleblower’s total award would be $5 million or less and none of the rule’s disqualifying conditions apply, the Commission will presume the claimant should receive the full 30 percent statutory maximum—effectively defaulting to the highest possible payout for the smaller matters that make up the bulk of the CFTC’s whistleblower docket. The Commission’s release explains that, subject to Commission discretion and its analysis of relevant regulatory factors, the final rule incorporates this presumption for whistleblower awards of $5 million or less. The rule is modeled on the Securities and Exchange Commission’s Rule 21F-6(c), a step the Commission describes as further enhancing the ongoing efforts at harmonization between the two agencies.

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On September 22, 2026, the Commodity Futures Trading Commission’s Division of Market Oversight (DMO) issued CFTC Staff Advisory No. 26-27, providing the agency’s most detailed guidance to date on a fast-growing category of prediction market products known as “mention markets.” The advisory addresses event contracts that settle based on whether an individual will say or “mention” certain words, attend or appear at an event, or otherwise interact with another person. While the advisory does not ban these contracts outright or create new legal obligations, it establishes a framework of heightened scrutiny that designated contract markets (DCMs) should expect when listing or seeking to list such products.

On September 16, 2026, Commodity Futures Trading Commission (CFTC) Director of Enforcement David Miller spoke at DACOM NYC 2026, offering a statement on how the CFTC intends to police prediction markets, carbon credit programs, and traditional derivatives markets alike. Director Miller’s remarks touched on insider trading, market manipulation, retail fraud, and the Bank Secrecy Act and included extended comments on how the agency views the intersection of new event-contract markets with decades-old regulatory principles.

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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.