US Regulators Prepare Crypto Securities Guidance, Prediction Market Rules

According to entries published on a federal portal that tracks regulatory actions under White House review, both agencies filed "prerule" submissions with the Office of Information and Regulatory Affairs (OIRA) this week.

The Commodity Futures Trading Commission submitted a regulatory item titled "Prediction Markets" on 2 Mar, while the Securities and Exchange Commission followed on 3 Mar with a separate action titled "Commission Interpretation on Application of the Federal Securities Laws to Certain Types of Crypto Assets and Certain Transactions Involving Crypto Assets."

Both filings are currently listed as pending review under Executive Order 12866, the process through which the White House evaluates significant regulatory actions before agencies can move forward with formal rulemaking. 

The "prerule" designation typically indicates that an agency is preparing to publish a proposal or policy framework and has begun an internal interagency review before releasing it for public comment. 

Prediction markets enter rulemaking pipeline 

Signals of the CFTC’s upcoming move surfaced earlier this week. Speaking at a Milken Institute event on 3 Mar, Chairman Michael Selig said the agency was preparing new guidance and rulemaking steps to bring clearer standards to derivatives and event-contract markets. 

"We are going out with guidance in the very near future," Selig said, adding that the agency plans to establish "very clear standards as to what can be self-certified in our markets and what cannot." 

Selig framed the effort as part of a broader push to bring trading activity that has migrated offshore back under US regulatory oversight. "We’ve got to set the right rules and regulations for it here in the United States, or otherwise we’re just going to have black markets offshore," he said. 

The chair pointed to crypto derivatives as an example, arguing that unclear rules under previous administrations pushed liquidity abroad. "We need to have that liquidity here in the US, and we need the right investor protections to ensure that these firms don’t blow up and affect our shores," he added. 

SEC moves to clarify rules 

Meanwhile, the SEC’s planned interpretation suggests the agency may seek to clarify how existing securities laws apply to certain categories of crypto assets and transactions, an issue that has remained contested across multiple enforcement cases and policy debates. 

In a statement to Sandmark, an SEC spokesperson said the effort aligns with broader attempts to clarify the regulatory treatment of digital assets. 

"As Chairman Atkins said, the Commission will consider interpretive guidance around a token taxonomy for crypto assets - in line with market structure legislation - to ensure that investors and innovators have a clear understanding of their regulatory obligations," the spokesperson said. 

The interpretation would not change existing law but would instead reflect the agency’s view on how current federal securities laws apply to certain crypto assets and related transactions. 

The SEC is also working on another proposal related to the offer and sale of crypto assets. 

Sandmark contacted the CFTC for comment but did not receive an immediate response.