On June 16, the CFTC issued a Request for Information (RFI) to identify regulatory actions that currently make fintech partnerships with federally regulated institutions more difficult, as well as ways to reduce friction for eligible fintech applications. The RFI was issued under Executive Order 14405 (Integrating Financial Technology Innovation into Regulatory Frameworks) and applies to financial companies whether or not they are registered with the CFTC. The CFTC is requesting information on how fintech firms are currently, or would like to be, included in derivatives markets, commodities markets, and other market participants. Comments will be due 21 days after Federal Register publication.
More than 50 gaming associations, tribal governments, and labor unions sent a letter to the Senate on June 16 requesting the CLARITY Act ban prediction markets from offering sports and other similar event contracts. The organizations are concerned about the CLARITY Act potentially authorizing prediction markets without going through tribal or state laws and regulations. The letter requests the CLARITY Act include legislation from Senators Adam Schiff (D-Calif.) and John Curtis (R-Utah) banning CFTC-regulated entities from listing sports events contracts.
A bill in the North Carolina House, titled the “NC Digital Asset and Stablecoin Act,” would create a framework for state-chartered financial institutions to provide digital asset custody and staking services, as well as bringing the state stablecoin framework in line with the GENIUS Act. The bill contains consumer protection requirements and would ensure institutions that offer digital assets keep 100% reserves for digital assets owned by consumers. The measure passed the NC House on June 9 and was referred to the Committee on Rules and Operations in the Senate on June 11.
After requests from Bitnomial Exchange and Coinbase, the CFTC’s Division of Market Oversight announced no-action relief to DCMs seeking to convert their existing perpetual-style futures contracts into digital commodity perpetual futures contracts. The letter states that the Division will not recommend enforcement if DCMs remove expiration dates from their existing digital commodity perpetual-style futures contracts and implement amendments to convert them into true perpetual futures. Certain conditions under Regulations 40.6(a)(3) and 40.6(b)(1), including soliciting feedback from market participants with open positions, providing advance notice, providing an opportunity to exit positions, offering appropriate risk disclosures, and ensuring that no other material contract terms are modified, must be met. DCMs must also notify the CFTC of their intention to rely on the no-action position and certify compliance with all conditions. The no-action positions expire on June 30, 2026.
On June 12, the CFTC filed suit against New Mexico to block the state’s efforts to apply state gaming laws to prediction markets. The suit follows New Mexico’s recent lawsuit in state court against a notable prediction market for violations of state gambling laws and requested injunctive relief. The CFTC complaint requests a declaratory judgement stating that the CFTC has exclusive authority over registered prediction markets. New Mexico is the latest state to file suit against a prediction market with a CFTC response, following actions in Arizona, Connecticut, Illinois, New York, Minnesota, Rhode Island, and Wisconsin.