Commodity Futures Trading Commission (CFTC) Chairman Michael Selig told House lawmakers that the agency will pursue anyone who commits fraud or insider trading in prediction markets “with the full force of the law.”
Selig appeared before the House Agriculture Committee on Thursday as the agency faces mounting pressure over fast-growing event contract platforms and shady deals tied to political ads.
Prediction markets under the CFTC microscope
Selig told the committee that the Commodity Exchange Act gives the CFTC “very broad and exclusive jurisdiction” over commodity derivatives.
The chairman said he inherited a wave of self-approved event contracts from the previous administration, when “the floodgates really opened.”
The agency has since issued an advance Notice of Proposed Rulemaking To establish clearer criteria for forecasting market contracts.
Seelig described a multi-layer monitoring system. Designated contract markets act as self-regulatory organizations and serve as the first line of defense.
The CFTC reviews each contract self-certification and reserves the authority to deny listing. Agency too Filed a lawsuit against multiple countries Which attempted to apply gambling laws to licensed prediction market operators.
Lawmakers press $500 million worth of oil deals
Deputy McGovern raised a specific incident that occurred on March 23, when someone was roughly laid down $500 million in oil and stock futures trades Minutes before President Trump posted about the ceasefire talks on Truth Social.
Traders are betting that oil prices will fall and stocks will rise.
“We have a zero-tolerance policy when it comes to fraud, abuse of business practices and manipulation, and anyone who engages in this behavior will face the full force of the law.” He said Selig, Chairman of the Commodity Futures Trading Commission.
Selig declined to confirm or deny any active investigation, stating that doing so would hinder enforcement efforts.
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CFTC-SEC pushes encryption and sets standalone rules
Beyond implementation, Selig highlighted: The agency’s role in shaping crypto policy. The Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) signed a memorandum of understanding in March to… Coordination on digital asset monitoringStablecoins and token collateral.
Selig said the two agencies had “failed to work well together” for too long and that the memorandum of understanding would create open communications on monitoring and policy making.
Ranking Member Craig pressed Selig on whether he would pause rulemaking while serving as sole commissioner of the CFTC. Selig refused.
He told the committee that investor protections and market safeguards could not wait for additional candidates.
The coming weeks may reveal whether this stance will spark more opposition from Congress or accelerate the forecast market framework the industry has been waiting for.
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