Though the CLARITY Act did not reach the Senate floor before the August recess, key members of the crypto industry haven’t given up hope. During the week of August 17, industry leaders attended high-level meetings with members of the Trump administration, including President Trump on August 19 and Commerce Secretary Howard Lutnick, to push the CLARITY Act through the Senate before midterm elections complicate passage.
On August 20, the CFTC held the inaugural meeting of its Innovation Advisory Committee (IAC), comprised of individuals from cryptocurrency companies, prediction markets, trade associations, and more. These industry members advise the CFTC on the intersection of technology, law, policy, and finance. IAC Chair Walt Lukken emphasized that the committee’s purpose is to provide “practical advice to the commission that is rooted in real world experiences” rather than to advocate for any specific technology or business model. Members discussed topics including crypto’s regulatory evolution, AI in derivatives markets, and novel events contracts in prediction markets.
The CFTC and Kentucky regulators both filed competing motions in the U.S. District Court for the Eastern District of Kentucky to determine the regulatory status of events contracts. At issue is whether Kentucky’s attempts to tax and limit sports-focused event contracts through enforcement have harmed the federal agency’s exclusive regulatory authority over these markets. The case highlights a deepening federal-state conflict over whether state governments have the authority to regulate prediction markets, particularly those involving sports-related event contracts.
In a Manhattan district court, the CFTC opposed a bid by a sergeant to dismiss criminal charges stemming from his alleged bets on the capture of former Venezuelan President Nicolás Maduro. According to prosecutors, the soldier had material knowledge of the Venezuela operation and used military secrets to make over $400,000 on a prediction market. The district court judge found the agency had “regulatory perspective” that could help the court’s decision.