CFTC Chairman Michael Selig unveiled a sharper reset for the U.S. derivatives regulator, saying the agency is moving away from what he described as politically driven enforcement while preparing prediction market reforms and using artificial intelligence to monitor fast-growing retail activity.
In a CNBC interview, Selig said the Commodity Futures Trading Commission is returning to its core role of regulating markets, stressing that the agency should not be used for “lawfare” or to target politically disfavored industries.
At the same time, Selig said the shift would not mean a softer stance on market misconduct, adding that the CFTC would continue pursuing manipulation, fraud, insider trading and abuse across prediction markets, crypto and other derivatives products.
Gemini case becomes symbol of enforcement reversal
Selig pointed to Gemini, the crypto exchange founded by Tyler and Cameron Winklevoss, as an example of what he suggested was politically motivated enforcement against crypto firms under the previous administration.
When pressed on whether Gemini had misled the CFTC, he declined to discuss the facts, citing ongoing litigation, but said the agency was “righting those wrongs” and starting fresh.
The Gemini case dates back to June 2022, when the CFTC sued the company in Manhattan federal court, alleging it made false or misleading statements to the agency during a 2017 review of a proposed bitcoin futures contract. The regulator said those statements concerned whether the product, which was tied to Gemini’s bitcoin auction price, could be vulnerable to manipulation.
Gemini agreed in January 2025 to pay a $5 million civil penalty without admitting or denying the allegations. However, on May 27, 2026, the CFTC said it had joined Gemini in seeking relief from that judgment, marking a rare reversal of a settled enforcement case.
Prediction markets face new guardrails
Selig defended the CFTC’s authority over prediction markets, saying federal law gives the agency jurisdiction over derivative contracts, including event contracts tied to sports, politics and other outcomes.
He said such products are different from cash bets placed with sportsbooks, because they trade on regulated exchanges overseen by the CFTC.
Selig rejected the idea that sports-linked event contracts should automatically be treated like traditional gambling, saying their legal treatment depends on how the products are structured and whether they trade as derivatives on CFTC-regulated platforms.
Still, he acknowledged that sports and political event contracts raise difficult questions. The agency has received more than 1,500 comments on the issue and has a proposed rule under review at the White House’s Office of Information and Regulatory Affairs, he said.
Selig said the CFTC has discretion to prohibit certain contracts involving sports, gaming, war, terrorism or assassination, adding that he believes Congress intended the agency to serve as the exclusive regulator for those products.
CFTC turns to AI as market activity grows
Selig said the CFTC is seeing rising retail participation across its markets, a trend that began with smaller contracts designed for individual traders before expanding through crypto and prediction markets.
To respond, he said the agency is using AI tools to help staff monitor markets more efficiently while also recruiting new employees.
The chairman concluded that the agency has already brought several enforcement actions and has more cases in the pipeline, while also sending subpoenas, underscoring that the CFTC’s reset is aimed at ending political targeting, not weakening market oversight.