The US Commodity Futures Trading Commission (CFTC) has established an Innovation Task Force to create a new regulatory framework covering cryptocurrencies, artificial intelligence (AI) and prediction markets. This step, under the supervision of Commission Chairman Michael Selig, aims to supervise derivatives markets with clearer rules and resolve ongoing uncertainties in the crypto derivatives market in the United States. Michael Passalacqua, formerly an attorney at Simpson Thacher and now a senior adviser to the president, was appointed to lead the task force.
A New Era in Derivatives Markets in the USA
This move by the CFTC stands out as the first concrete step towards transforming the regulatory approach, which has been predominantly focused on sanctions in the past, into a rules-based system. The task force aims to work with the CFTC’s Innovation Advisory Committee to clarify the position of code-based brokers within the Commodity Exchange Act. Michael Selig, in his statement at a recent event in New York, stated that they want to provide those who develop innovative solutions with the opportunity to communicate directly with CFTC staff, and emphasized that they will take into account not only cryptocurrencies, but also prediction markets and artificial intelligence.
The majority of crypto derivatives trading in the US continues to shift to offshore markets due to regulatory uncertainty. Selig stated that the new initiative aims to reduce the threat of investigation by providing a legitimate compliance process for the “builders.”
“The goal of the innovation advisory task force is to create an environment where developers and innovators can engage directly with staff and learn about the process,” Michael Selig noted.
It is noteworthy that prediction markets are also considered in this context. Recently, platforms such as Kalshi have faced lengthy court processes to list event-based derivatives. The new mandate aims to provide a more general and clear regulatory framework for forward contracts based on political and economic possibilities, rather than individual applications made on a case-by-case basis.
The Global Liquidity Race and the Challenges Facing the United States
In the US, institutional capital is still stuck in less efficient spot markets, while price formation and high-volume transactions largely occur in offshore markets. The high open position volume seen especially in decentralized derivative protocols such as Hyperliquid shows that investors prefer flexible solutions.
The Commission’s main challenge is to ensure that this liquidity remains in the United States. The task force expands the definition of Futures Commission Merchant to include smart contract platforms, allowing protocols to register directly. Thus, decentralized finance (DeFi) transactions come under the control of the US regulator.
Otherwise, if the CFTC imposes bank-level capital requirements on developers, there is a risk that innovation will advance outside the US and domestic startups will turn abroad. At this point, regions such as Asia can quickly seize new opportunities with code-compliant regulations.
In a global environment of increasing regulatory competition, the US regulator is trying to keep up with technology for the first time. Actors in the industry hope that this new approach of the CFTC will bring stability to the markets instead of uncertainty.
