Coinbase Could Gain as CFTC Drops Ban on Event-Based Contracts

TLDR

• CFTC Chairman Michael Selig announced a unified regulatory approach for crypto-linked markets.
• Selig directed the withdrawal of proposals that restricted political and sports event contracts.
• The CFTC will begin drafting a new rulemaking framework for event-based prediction contracts.
• Clear Street analysts believe Coinbase could benefit from the regulatory shift.
• Project Crypto was introduced to support innovation and legal clarity ahead of pending legislation.

The U.S. Commodity Futures Trading Commission (CFTC) is moving to reshape crypto-linked prediction market oversight, signaling clearer regulatory direction, as newly appointed Chairman Michael Selig pushes for closer coordination with the Securities and Exchange Commission (SEC) and a unified framework to support blockchain innovation.

CFTC Chairman Withdraws Previous Event Contract Restrictions

Michael Selig, in his first remarks as CFTC Chairman, outlined a unified federal approach to regulating digital asset markets. He addressed attendees at a joint SEC–CFTC Harmonization Event, stating collaboration was essential to innovation.

“The objective is to implement clear and principled rules of the road for crypto,” analyst Owen Lau quoted Selig in a Clear Street report. Selig emphasized that regulatory clarity should take priority over parallel agency actions, sending a message of consolidation.

The CFTC, under Selig’s direction, withdrew the proposed 2024 rule that would have banned event contracts tied to politics or sports. He also retracted a 2025 staff advisory that had warned firms against offering sports-related contracts.

According to Lau, these moves show the agency is stepping away from prior uncertainty and is ready to reframe its approach. He said the earlier position had contributed to legal ambiguity rather than preventing risk.

Selig directed staff to start a new rulemaking process to establish a clearer framework for event contracts. He also told teams to reevaluate the agency’s role in related court cases, indicating a shift in legal posture.

Coinbase Positioned for Growth as Project Crypto Advances

Coinbase launched prediction markets in all 50 U.S. states shortly before Selig’s announcement. Clear Street analysts suggest the platform could benefit directly from this changing stance.

Owen Lau called prediction markets a “greenfield opportunity,” adding the leadership was what the industry had been requesting for years. The Clear Street report emphasized that CFTC’s new posture may support platforms in defending themselves in court.

Selig’s “Project Crypto” aims to align agency regulation with emerging market structures, even before Congress finalizes broader legislation. That legislative process will define whether digital assets fall under SEC or CFTC jurisdiction.

Clear Street notes the Senate Agriculture Committee passed the “Digital Commodity Intermediaries Act” on the same day as Selig’s remarks. However, Lau argued that the CFTC’s new strategy had greater implications for the sector.

Coinbase could benefit as courts evaluate jurisdictional claims over commodity derivatives including event contracts. Clear Street believes the CFTC may now defend exclusive control in upcoming legal battles.

Project Crypto Could Shift Jurisdiction Over Prediction Markets

Selig’s Project Crypto signals readiness to confront legal confusion surrounding event contracts in crypto-linked markets. The project supports creating new structures ahead of legislative finalization.

Clear Street said Selig instructed his teams to prepare a new rulemaking process for event contracts and update litigation strategy. These instructions show a clear pivot away from the previous non-interventionist approach.

Circle’s USDC stablecoin plays a large role in decentralized platforms such as Polymarket, which may also benefit from the policy shift. Lau’s report underscores that the new direction could support expansion for platforms integrating crypto in event-based markets.

The CFTC, under Selig, now appears willing to assert its jurisdiction in legal conflicts involving prediction markets. Lau said these changes may assist platforms in asserting their operational legality.

Court decisions are still pending, but Clear Street sees the new rulemaking as a critical step toward resolving industry uncertainty. According to the firm, the regulatory shift marks a change in how the agency engages with innovative contract types.

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