SEC Chair Atkins Backs CFTC's Selig as Prediction Markets Fight Moves to Courts and Rulemaking
SEC Chair Paul Atkins publicly defended CFTC Chair Michael Selig on June 16, 2026, amid growing questions about whether the CFTC has the institutional capacity to regulate prediction markets.
SEC Chair Paul Atkins publicly defended CFTC Chair Michael Selig on June 16, 2026, amid growing questions about whether the CFTC has the institutional capacity to regulate prediction markets. According to data compiled by quantvps.com for the Bitcoin Foundation, the sector recorded $36.6 billion in quarterly volume during Q1 2026, surpassing traditional online gambling for the first time, though that figure has not been independently verified by a primary industry data provider.
Atkins stepped in Monday to back Selig against critics who question the agency's legal standing to push forward a broad new regulatory framework for prediction markets. His defense, reported by The Block, came as the CFTC faces simultaneous pressure from state governments in court, the publication of its first formal rulemaking on event contracts, and the challenge of operating without a full commission.
The public show of support signals a deliberate alignment between the two agencies at a pivotal moment. Selig was installed as CFTC Chair under the Trump administration, and the current regulatory posture represents a deliberate break from the prior administration's approach. At a joint "Project Crypto" summit held with Atkins on January 29, 2026, Selig announced that the CFTC would withdraw a 2024 proposed rule that would have prohibited certain event contracts, signaling a shift toward permitting a broad class of prediction market activity under a new framework.
A Shorthanded Agency With a Full Agenda
The central vulnerability driving criticism of Selig is structural. The CFTC currently has only one confirmed commissioner, Selig himself, rather than the standard five-member body. A commission quorum of three is required for rulemaking, and any rules Selig advances without that quorum in place could face procedural legal challenges. Critics, including Democratic members of Congress, have also argued that the agency's consumer protections in the proposed rules do not go far enough.
On June 10, the CFTC published a 267-page proposed rulemaking titled "Prediction Markets; Public Interest Determinations," the agency's first formal rule proposal on the sector. Rather than banning categories of contracts outright, the proposal establishes a three-factor public interest test applied to contracts touching on war, terrorism, assassination, illegal activity, or gaming. Most sports contracts would remain permitted under the framework. The CFTC has set a 90-day review window for evaluating individual event contracts.
Selig framed the proposal as a practical advance: "This proposal gives the commission a durable, transparent framework to identify the contracts Congress directed us to scrutinize while letting legitimate markets move forward."
Jurisdictional Battles on Multiple Fronts
The CFTC's position rests on the Commodity Exchange Act, which grants the agency exclusive federal authority over event contracts traded on its regulated exchanges, preempting state gambling laws. Several states disagree. The CFTC is actively defending lawsuits in Arizona, Illinois, and Connecticut, where those states have moved to classify prediction market activity as gambling subject to state regulation. In Massachusetts and New Jersey, the agency has taken a different posture, filing amicus briefs asserting exclusive federal jurisdiction, including before the Massachusetts Supreme Judicial Court and the Sixth Circuit.
A significant legal win came on April 6, when the Third Circuit Court of Appeals affirmed a preliminary injunction blocking New Jersey from enforcing its gambling laws against Kalshi's sports event contracts.
Selig has not been subtle about his intentions: "To those who seek to challenge our authority in this space: let me be clear. We will see you in court."
Atkins acknowledged jurisdictional complexity as far back as February, telling the Senate Banking Committee that prediction markets represented a "huge issue" with "overlapping jurisdiction potentially" between the SEC and CFTC.
A Memorandum of Understanding between the two agencies, announced March 11, confirmed primary authority over prediction markets with the CFTC, formalizing an arrangement the agency already held under the Commodity Exchange Act.
Platform Scale: What the On-Chain Numbers Show
Polymarket, the largest prediction market by volume and domiciled offshore, currently holds $450.54 million in total value locked on the Polygon blockchain, as of June 16, 2026. Its 30-day decentralized exchange volume stands at $12.41 billion, with open interest at $481.99 million and annualized fees of $92.1 million. Over the past 24 hours, the platform processed roughly 2.59 million transactions across 139,616 active addresses. All figures are sourced from DefiLlama and reflect point-in-time on-chain metrics.
Polymarket has raised $2.879 billion in total capital, including $2.6 billion in strategic investment from Intercontinental Exchange (ICE) across two funding rounds. ICE is one of the world's largest traditional financial market operators and holds a strategic stake in the platform.
Its US-regulated competitor, Kalshi, operates as a CFTC-regulated Designated Contract Market and has partnered with Nasdaq. Combined monthly volume across Kalshi and Polymarket grew from under $5 billion in September 2025 to approximately $24 billion in April 2026.
What This Means Outside the United States
For users in emerging markets, the US regulatory picture is largely a background variable rather than a direct determinant of access. Nigeria remains one of the more active emerging-market participants, with platforms supporting naira deposits and withdrawals for local event contracts covering elections and fuel prices.
The CFTC framework does not govern Polymarket's offshore entity, which serves non-US users, but a restructuring driven by US compliance pressure could affect global liquidity and platform availability.
India presents a sharper contrast. The country is home to one of the largest non-US user bases for crypto-native prediction market participation, but India's Promotion and Regulation of Online Gaming Act 2025 came into force on May 1 and classifies prediction markets as prohibited online money gaming. India's Ministry of Electronics and Information Technology has issued a blocking order against Polymarket and is preparing a similar order for Kalshi. US regulatory clarity does nothing to resolve that domestic prohibition, which is framed around gaming law rather than derivatives law.
Across sub-Saharan Africa, Polymarket data shows $1.7 billion in trading volume tied to Africa-related markets and 147 active markets on the continent as of June 16, 2026. Access flows through offshore wallets and, in some cases, VPNs, making the direct reach of any US rulemaking limited for now.
South Asia follows a similar pattern. Pakistan's rapidly expanding peer-to-peer crypto volumes through 2025 and 2026 have made the region an active, if largely informal, participant in global prediction markets. Users in Pakistan, Bangladesh, and Sri Lanka primarily access platforms through VPNs and offshore wallets, placing them well outside the reach of either the CFTC's new framework or India's outright prohibition.
What Comes Next
The CFTC's 90-day comment period on the proposed rulemaking opens the door for industry participants, state governments, and consumer advocates to shape the final rules. The more immediate test will come in court, where outcomes before the Massachusetts Supreme Judicial Court and the Sixth Circuit could either reinforce or undercut Selig's jurisdictional claims. For developers building on Polygon or other chains that host prediction market infrastructure, the current proposal focuses review at the exchange level rather than the smart contract level, though that scope could shift before finalization.
The Atkins-Selig alignment holds for now, but its durability depends on Senate confirmation of additional CFTC commissioners and the resolution of active cases in Arizona, Illinois, Connecticut, Massachusetts, and the Sixth Circuit. That litigation docket sits alongside two other major regulatory agendas Selig is simultaneously advancing: proposed rules for decentralized finance markets and for perpetual futures. For a commission operating with a single confirmed member, the breadth of that agenda is substantial and the institutional stakes at each front are high.