US Regulators Gear Up to Guide New Tech in Finance

The U. S. Commodity Futures Trading Commission has set up a new team to help shape rules for the fast‑growing worlds of crypto, artificial intelligence and prediction betting. The group will sit alongside existing bodies such as the Securities and Exchange Commission and its own crypto watchdog, aiming to give clear guidance to developers who want to build financial products with these cutting‑edge tools. Led by senior adviser Michael J. Passalacqua, the task force’s mission is to create a stable framework that encourages responsible growth while keeping American investors safe. Passalacqua said the team would “advance the CFTC’s innovation agenda across crypto, AI, and prediction markets, ” posting the message on a public social‑media platform.In March, the commission issued a letter to registered exchanges explaining how they must comply with rules for event contracts—those that allow people to bet on future happenings. The CFTC is now asking the public for feedback on whether new or amended rules are needed to oversee these markets. This move comes amid growing concern from lawmakers about insider trading and the potential misuse of prediction contracts for sensitive topics like terrorism or war. Both Kalshi and Polymarket have responded by tightening their policies to curb insider trading, such as blocking politicians or sports figures from betting on related events. The regulator remains firm that it has jurisdiction over prediction markets, warning states that challenge its authority that they will face court action. Recently, the commission signed an agreement with Major League Baseball to collaborate on limiting markets that could threaten game integrity. Meanwhile, states like Arizona and Nevada have taken legal action against Kalshi, alleging illegal gambling practices and temporarily banning certain contracts in those states.