In a markup on May 14, 2026, the Senate Banking Committee advanced the Digital Asset Market Clarity Act (“CLARITY Act”) by a vote of 15-9 with two Democrats in support. Senators Ruben Gallego (D-Ariz.) and Angela Alsobrooks (D-Md.) crossed party lines to support the bill but stated that they would pull their support without changes to the CLARITY Act. In particular, senators are still debating the inclusion of ethical guidelines for elected officials, blank exemptions for software developers, and provisions on stablecoin rewards as the bill passes through the Banking Committee. Prior to a floor vote, the CLARITY Act will be combined with the Senate Agriculture Committee version of the bill and, if passed, would be reconciled with the House version of the bill prior to the president’s signature.
According to news reports, the SEC will be issuing an innovation exception for tokenized stocks soon, allowing a new way to wager on public share prices. The SEC would reportedly allow trading third-party tokens without the consent of the public company it tracks, causing some pushback from members of the industry and some SEC officials. As reported, the tokens would be traded on decentralized crypto platforms and wouldn’t carry the same protections of non-tokenized stocks.
In another action regarding prediction market jurisdiction, the CFTC sued Minnesota on May 19, 2026, to block the state’s recent law that would make working in the operation of a prediction market a criminal felony. The law would go into effect on August 1, 2026, so the CFTC is seeking a preliminary injunction to prevent its enactment prior to the effective date. The CFTC argues that it has exclusive authority over prediction markets under the Commodity Exchange Act, and the law would criminalize farmers who rely on hedging weather-based event contracts to minimize the risks of natural disasters.
On May 13, 2026, the CFTC’s Division of Market Oversight and Division of Clearing and Risk issued a no-action letter stating that they would not begin enforcement proceedings against designated contract markets (DCMs) or derivatives clearing organizations (DCOs) for certain data reporting associated with a fully collateralized event contract transaction. The position applies to firms failing to report swap data to a swap data repository when the firm “will report transaction and market data in a manner similar to that required for DCMs for futures and options.” The Divisions of Market Oversight and Clearing and Risk report an increase in no-action letter requests relating to event contracts data reporting and state that the no-action position will be effective until the CFTC adopts a final rule on the matter.
On May 18, 2026, CFTC Chairman Michael Selig announced that DJ Hennes is the new director of the Market Participants Division. Specifically, Selig hopes Hennes’ experience will help in the CFTC’s effort to “future-proof” CFTC regulation of crypto assets and prediction markets. Hennes previously worked at a large law firm as a director of its financial services practice and has experience with digital assets and prediction markets.
Morrison Foerster partners Alexandra Steinberg Barrage, Ryne Miller, Trevor Levine and Rhys Bortignon and associate Maria Aguilar-Rocha will lead the Futures Industry Association (FIA) L&C Division webinar titled, “Stablecoins for Derivatives – Collateral, Settlement, and More” on Thursday, June 4, 2026, at 10:00–11:00 a.m. ET. The panel will focus on the proposed uses of payment stablecoins with respect to U.S. derivatives markets, the role of the GENIUS Act, key policy and regulatory issues, and important legislative developments. Additionally, panelists will discuss the use and relevance of stablecoins for the global derivatives markets, related tokenization developments, and updates on U.S. digital asset market structure legislation. To learn more or to register, please visit the website.