The US Securities and Exchange Commission has officially put on hold the creation of Exchange Traded Funds (ETFs) that are wrappers for prediction market contracts, saying it needed to study the "implications" of the wildly popular assets tied to specific real-world outcomes.
US SEC Delays Prediction Market ETFs Debut, Seeks Public Comment
21 May 2026 - 08:59 CEST
Pause on novel products
In a brief 20 May statement to address "novel" ETFs, the regulator’s Chairman, Paul Atkins, said he had instructed his staff "to seek input from the public on how the Commission should respond to recent market changes," without elaborating. "Novel products raise novel questions," Atkins said.
The two-paragraph statement confirmed market speculation about the suspended rollout of the products, which would have opened access to the popular prediction assets via a single stock ticker.
Atkins' reservations come amid an explosion in demand for event contracts, which are dominated by Polymarket and Kalshi, and a rush by asset managers to seek approvals for related products to tap retail capital. The CFTC regulates prediction markets, while the SEC oversees ETF wrappers.
Issuers cooperating
So far this year, Kalshi has recorded a cumulative trading volume of $38.5bn, ahead of Polymarket’s $33.5bn, according to DeFiRate data.
The SEC’s decision has sidelined approximately 24 prediction markets-based ETFs that had filed for approval and were due to start trading in the first half of May. Without naming them, Atkins indicated that the fund houses have been cooperative, saying: "I appreciate the willingness fund sponsors have shown in delaying the effectiveness of a number of novel ETFs."
One of the three fund houses behind the ETFs expressed support for the SEC’s move. "We recognize that innovative ETF products often require additional review, particularly around liquidity, market structure, and investor protections," GraniteShares CEO Will Rhind said in a 10 May statement to CNBC. He said the firm wanted to ensure investors "are comfortable with how these products work."
Stopping the clock
Speculation of a delay has been circulating in recent weeks. Reuters cited sources on 4 May who said that the SEC had stopped the 75-day automatic approval clock just as the ETFs were poised to list.
Based on the issuers’ February legal filings and regulatory rules, the ETFs could have started trading between 5 May and 8 May.
Firms that had offered the products included Roundhill Investments, which had filed for six all-or-nothing political ETFs targeting the upcoming 2026 US midterm majorities and the 2028 presidential race. It also sought to trade six economic prediction ETFs that included binary bets on a US recession and tech sector layoffs.
US election outcomes
Both Bitwise and GraniteShares filed for six similar election ETFs. Bitwise also offered one crypto fund about whether Bitcoin would top $100,000 in 2026.
Eric Balchunas, Senior ETF Analyst at Bloomberg Intelligence, expressed optimism on 4 May about eventual progress: "Delay is likely temporary, so stay tuned," he posted on X.
