CFTC Chair Outlines New Crypto Regulatory Blueprint: DeFi News, Prediction Markets, and Perpetual Contracts Included

Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam has recently proposed a comprehensive regulatory framework covering decentralized finance (DeFi News), prediction markets, and perpetual contracts, marking a new phase of coordinated advancement in U.S. crypto regulation. The initiative, dubbed “Project Crypto,” represents the first substantial collaboration between the CFTC and the Securities and Exchange Commission (SEC) on crypto asset regulatory jurisdiction, aiming to end the long-standing ambiguity and conflict over their respective scopes.

As one of the current five commissioners of the CFTC, Behnam possesses the unique advantage of being able to push policies forward even without a quorum requirement. Coupled with clear White House support, this makes the reform more enforceable than in the past. The two agencies are jointly developing clear crypto asset classification standards to help market participants accurately determine whether their products fall under the jurisdiction of the CFTC, SEC, dual regulation, or are completely exempt. Related guidance is forthcoming.

In the realm of prediction markets, the CFTC plans to formally establish regulatory authority to address disputes with state gaming regulators. Behnam emphasized that the agency is advancing a rule-making process with greater legal force, rather than relying solely on temporary guidance, to enhance policy stability and durability. For perpetual contracts—leveraged derivatives without expiration dates that have long flourished overseas—the CFTC has also indicated that it will soon issue regulatory guidance, acknowledging that these products have become overly reliant on offshore markets due to the absence of U.S. regulation. However, the regulatory path is not without obstacles. A Supreme Court ruling two years ago weakened administrative agencies' judicial deference to their own interpretations, meaning that any informal guidance could face legal challenges and be easily overturned. Therefore, the CFTC is accelerating the introduction of codified rules to establish a more solid legal foundation, ensuring that the regulatory framework can withstand judicial scrutiny in the future.