The evolving legal framework for prediction markets in the US has moved beyond a standard jurisdictional dispute between federal regulators and state gaming authorities.
CFTC Intervention Highlights Trump Prediction Market Stakes
17 February 2026 - 19:18 CET
By Ana Pereira
The outcome of this clash will determine the classification of event contracts under federal law while simultaneously shaping a growing digital asset ecosystem with direct ties to the family of President Donald Trump.
Following the US Presidents' Day holiday on 17 Feb, the Commodity Futures Trading Commission chair, Michael Selig, issued a public warning to state authorities attempting to regulate prediction markets. The unusually direct message promised challengers a day in court. This remark accompanied a formal amicus brief filed by the agency in the Ninth Circuit, supporting Derivatives North America, the US derivatives subsidiary of Crypto.com.
The core of this legal dispute rests on whether state officials in places like Nevada can prohibit event contracts that are listed on federally overseen exchanges. State gaming boards argue that contracts tied to real-world outcomes resemble traditional gambling and should fall under local jurisdiction. The CFTC maintains that these instruments qualify as swaps under the Commodity Exchange Act, granting the agency exclusive oversight.
The political dimension of derivatives
The case carries significant broader implications because the derivatives infrastructure of Crypto.com underpins the digital expansion of the sitting president. Trump Media and Technology Group, the operator of Truth Social, announced an exclusive partnership in late October to integrate prediction markets directly into its social media platform.
The relationship between the two entities involves substantial capital commitments. In Aug 2025, Trump Media announced plans to raise approximately $6.42bn to acquire a massive supply of Cronos, the native token of Crypto.com. The transaction was structured through a definitive agreement with a Nasdaq-listed special purpose acquisition company, creating a digital asset treasury vehicle named Trump Media Group CRO Strategy.
Consequently, any ruling from the Ninth Circuit regarding the legality and oversight of event contracts will directly influence the regulatory environment for these presidential business ventures. By intervening to assert federal jurisdiction over state-level enforcement, the CFTC is establishing a legal precedent that will ultimately determine how, and where, this multibillion-dollar prediction market ecosystem can operate.
