Making America the Crypto Capital of the World | New CFTC Chairman Michael Selig

What It Covers

New CFTC Chair Michael Selig, the 16th chair sworn in December 2024, outlines his regulatory agenda: onshoring perpetual derivatives within months, withdrawing Biden-era prediction market bans, clarifying crypto commodity definitions, and creating innovation exemptions to keep blockchain development inside the United States.

Key Questions Answered

• •Perpetuals Onshoring Timeline: Selig plans to bring perpetual derivatives markets back to the US within approximately one month by issuing no-action relief and clarifying whether perps qualify as futures or swaps under existing CFTC rules. Currently, traders must use offshore vehicles to access perps, which represent the largest liquidity source in crypto markets.
• •Commodity Definition Scope: Under the Commodity Exchange Act, virtually every asset class qualifies as a commodity except onions and motion picture box office receipts. This means the CFTC holds anti-fraud and anti-manipulation authority over Bitcoin spot markets, prediction markets, sports events, and political contracts — a far broader mandate than most crypto builders recognize.
• •Prediction Market Insider Trading Standard: The CFTC applies a misappropriation theory to police insider trading on event contracts. Any person who breaches a duty of confidence to an employer by trading on non-public information — such as a MrBeast employee trading ahead of YouTube video releases — faces civil penalties through exchange-level enforcement or direct CFTC action.
• •DeFi Developer Safe Harbor: Selig is actively drafting rules distinguishing software developers pushing non-custodial code from regulated intermediaries. A staged innovation exemption will allow firms to test products at limited volume without full exchange registration, giving builders a defined on-ramp before committing to CFTC licensing — reversing the previous administration's treatment of developers as de facto brokers.
• •Clarity Act as Insurance Policy: Even with the SEC and CFTC issuing aligned rulemaking that designates assets like Ether and Solana as digital commodities rather than securities, statutory legislation remains necessary. Without the Clarity Act codified into law, a future SEC chair could reverse all current guidance, reinstating enforcement-based regulation that previously drove firms to the Bahamas and Europe.