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CFTC sues New York over prediction-market oversight

Regulation

The Commodity Futures Trading Commission sued New York, asking a federal court to affirm its exclusive authority over prediction-market exchanges. The filing in the US District Court for the Southern District of New York follows state Attorney General Letitia James’s action against Coinbase and Gemini, which alleges their prediction-market products breach New York gambling laws. The CFTC argues the exchanges fall under federal commodity-trading oversight; state officials say gambling rules are needed to protect consumers.

The case could determine whether New York can apply its gambling laws to prediction-market exchanges.

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CFTC proposes two rules on prediction market oversight

The CFTC submitted two proposed rules to the White House Office of Management and Budget to clarify federal oversight of prediction markets. One would exclude casino-style gambling from the swap definition and could take effect soon after Federal Register publication; the other would classify event contracts as swaps and follow a public comment process.

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