Major regulatory bodies on Wall Street are advancing plans to oversee the cryptocurrency industry and the rapidly expanding prediction markets, moves that could have far-reaching implications for the broader financial landscape. After months of public statements from regulators and political wrangling in Congress, the Securities and Exchange Commission (SEC), which regulates U.S. stock markets, and the Commodity Futures Trading Commission (CFTC), which oversees derivatives trading, have submitted plans to the White House. Although specific details remain unclear, this procedural step marks one of the most significant actions taken by financial regulators under the current administration to date.
Since the President took office last year, U.S. financial regulators have sharply reversed their approach—adopting a far more accommodating stance toward digital assets and so-called "event contracts" compared to the previous administration. The plans being implemented under the current leadership may ultimately provide a formal roadmap for these industries and institutionalize the lighter regulatory touch that officials have recently exercised.
Both sectors have moved closer to the mainstream financial arena in recent times. Prediction markets have surged into a multi-billion dollar business, while digital asset firms have gained support from a President who aims to position the U.S. as the global "crypto capital." Now, operating in a favorable political climate, these industries appear poised to obtain the regulatory clarity they have long sought. This week, regulators took a critical step forward.
On Tuesday, the White House Office of Information and Regulatory Affairs (OIRA) received a significant cryptocurrency-related measure from the SEC in the form of commission-level guidance. According to an announcement on the OIRA website, the matter concerns "the application of federal securities laws to certain types of crypto assets and certain transactions involving crypto assets." When asked about the initiative, an SEC spokesperson referred to earlier remarks by the agency’s chair, who stated that regulators would consider issuing interpretive guidance around a token taxonomy for crypto assets—consistent with market structure legislation—to ensure investors and innovators clearly understand their regulatory obligations.
In theory, a token taxonomy could establish formal categories for different types of crypto assets—for instance, determining whether a particular token is considered a security under SEC oversight or falls under CFTC jurisdiction. This distinction could have significant consequences for how crypto firms register, disclose information, and operate. Commission-level guidance does require a vote by the commissioners and is considered more binding than staff-level statements. However, it does not involve the full rulemaking process, which includes public notice and comment.
The SEC chair has repeatedly emphasized that digital asset regulation is a cornerstone of the agency’s policy agenda. While stating that market structure legislation passed by Congress would be preferable, the chair has also noted that the agency possesses substantial authority to advance digital asset rules if necessary. A bill aimed at providing a regulatory framework for digital assets stalled earlier this year in the Senate, partly due to disputes between the banking industry and crypto firms over issues such as whether companies like Coinbase should be permitted to offer rewards to customers holding stablecoins on their platforms. In recent weeks, representatives from both the banking and crypto sectors have met multiple times at the White House in an effort to reach a compromise.
In addition to prioritizing cryptocurrency regulation, financial watchdogs under the current administration have also embraced prediction markets, which allow customers to place bets on outcomes ranging from presidential elections to college basketball games. Another notice on the OIRA website indicates that the White House is reviewing a CFTC measure related to prediction markets, having received the proposal on Monday. Typically, once OIRA review is complete and the CFTC formally releases the measure, the public will be able to submit comments.
The CFTC chair previously announced that the agency would develop new rules for the industry. On Tuesday, speaking at an event hosted by the Milken Institute, the chair noted that the measure has evolved into an Advance Notice of Proposed Rulemaking (ANPRM), similar to a preliminary draft concept released by an agency before formally beginning the rulemaking process.
Over the past year, trading volume in the prediction market industry has surged dramatically, driven largely by sports events, although contracts tied to recent Iran conflicts and broader Middle East tensions have drawn scrutiny from various quarters in Washington. Previously, independent agencies such as the SEC and CFTC were not required to submit new rules for White House review, but the current administration announced in 2025 that all executive branch agencies—including U.S. financial regulators—are expected to do so.
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