Regulatory tensions over prediction markets have escalated in the United States, as a former president publicly backs federal oversight and state authorities press legal actions against Kalshi, Polymarket, Crypto.com and Robinhood. The clash centers on who should regulate this rapidly growing crypto-adjacent sector and how rules should be enforced.

In a post on Truth Social on Tuesday, Donald Trump argued that the CFTC must retain exclusive jurisdiction over prediction markets and urged that the industry “thrive” under federal oversight. He also took aim at several state officials and lawmakers pursuing action against prediction-market platforms, saying that “we cannot have SCUM like Chris Christie, Letitia James, Tim Walz, and JB Pritzker setting the rules.” Trump’s comments add a high-profile political dimension to a case that has already seen courts and regulators circle the space.

Trump’s call comes amid a broader regulatory fight in which state authorities say prediction markets violate local gambling laws, while market participants contend they fall under the CFTC’s federally regulated derivatives framework. Kalshi and Polymarket—two of the most prominent players in this space—have pressed back against state enforcement efforts, arguing that the CFTC alone should regulate this market activity.

At the center of the regulatory battle is a dispute over jurisdiction. CFTC Chair Mike Selig has opposed the states’ actions, arguing that prediction markets fall within the agency’s exclusive purview as federally regulated designated contract markets. The agency has pursued legal action against several states for attempting to curb or ban these platforms, highlighting the ongoing friction between state and federal regulators in this evolving niche of financial markets.

Meanwhile, state authorities have pursued legal actions or cease-and-desist orders against platforms such as Kalshi, Polymarket, Crypto.com and Robinhood, arguing that these platforms operate gambling-like ventures without the proper licensing. Kalshi and Polymarket have responded by suing state authorities, asserting that the CFTC is the sole regulator for prediction market activity.

In parallel, Trump’s governance team and family ties have become part of the narrative. Reports have highlighted that Donald Trump Jr. is invested in Polymarket and serves on its advisory board, while he also acts as an adviser to Kalshi. Coverage in recent days noted that Trump Jr.’s stance on prediction markets had softened, arguing that the United States would risk being left out if it does not permit these platforms to operate. The context around these remarks underscores how political calculations may influence regulatory outcomes in this area.

Trump’s broader remarks reflect a familiar pattern in the debate over prediction markets: supporters argue that a clear federal framework fosters innovation and investor confidence, while opponents call for tighter control to address potential manipulation and consumer protections. The CFTC’s position has consistently framed prediction markets as a subset of the derivatives market governed by the Commodity Exchange Act, a view that has been used to justify federal oversight and enforcement against state-level restrictions.

Key takeaways

• Trump publicly reinforces the CFTC’s exclusive authority over prediction markets, signaling support for a federal framework amid ongoing state actions against Kalshi, Polymarket, Crypto.com and Robinhood.
• States including Minnesota, Illinois, New York and Arizona have pursued enforcement actions against prediction-market platforms, drawing legal battle lines with the federal regulator.
• Kalshi and Polymarket have countersued state authorities, asserting that regulation of prediction markets should be handled by the CFTC rather than by states’ gambling or securities laws.
• CFTC leadership has argued for preemption of state actions, positioning prediction markets within the agency’s designated contract market regime and its broader anti-manipulation and market-integrity standards.
• The ecosystem’s growth is tempered by regulatory uncertainty, as the CFTC moved to formalize oversight with a dedicated advisory team on event contracts and market integrity standards.

Trump’s position and the federal-versus-state regulatory tension

The social-media post from the former president framed the issue as a national regulatory test: safeguard a robust, federally governed market and resist the encroachment of disparate state rules. The post cited his intent to establish “rules of the road” that would serve as a Gold Standard for states, reflecting a broader push to unify the regulatory approach to prediction markets under federal supervision. The argument for federal primacy is grounded in the CFTC’s claim that these markets operate as derivatives and should be regulated as part of the national derivatives framework rather than by localized gambling laws.

On the other side of the debate, state officials argue that prediction markets can operate in a legal gray area, potentially circumventing stricter consumer protections if left under a federal umbrella without state involvement. The dispute has drawn attention to a broader question: how to balance innovation and consumer protection in a space where novel financial instruments intersect with gambling-related concerns in multiple jurisdictions.

In coverage surrounding Trump’s evolving stance, outlets noted that his own family has financial ties to Kalshi and Polymarket. Donald Trump Jr.’s involvement has fed commentary about how personal interests can intersect with policy positions, particularly as the administration or its successors weigh regulatory options for this class of markets. A separate report highlighted that Trump Jr. publicly signaled a softer stance on prediction markets, arguing that the U.S. risks losing out if it excludes these platforms from the financial landscape.

State actions, platform responses, and the federal framework

The enforcement push from state regulators has included cease-and-desist orders and licensing scrutiny aimed at Kalshi, Polymarket, and compatible platforms like Crypto.com and Robinhood. The core accusation is that these platforms offer gambling-like contract markets without the requisite licenses under state law. Kalshi and Polymarket have responded by asserting that their activities fall under the CFTC’s jurisdiction and that states lack the authority to regulate them as gambling or betting markets.

The CFTC, for its part, has pursued multiple lawsuits against states pursuing action against these platforms. The agency argues that the prediction-market market is a tightly regulated derivatives space, and that state-by-state interventions risk creating a patchwork of rules that could hinder innovation and cross-border participation. The agency’s posture emphasizes a federal standard—one designed to preserve market integrity, reduce manipulation risk, and provide consistent compliance expectations for participants and developers alike.

Beyond enforcement, the CFTC signaled a structural approach to oversight by forming an advisory team in March focused on the listing and trading of event contracts. The team is tasked with evaluating listing standards, surveillance measures, anti-manipulation controls, and overall market integrity, reinforcing a move toward formalized governance of prediction markets within the existing derivatives regime.

These developments come at a moment when participants, developers, and investors are weighing how the regulatory backdrop will shape product design, liquidity, and user access. Platforms like Kalshi and Polymarket have already built communities around real-world event contracts, and their ability to operate at scale could hinge on future court rulings, enforcement priorities, and any potential regulatory clarification from federal or state authorities.

Looking ahead: what to expect and what matters for the market

The immediate question is how the ongoing jurisdictional battle will be resolved. Courts could clarify the balance of power between federal and state authorities, potentially establishing a clearer boundary for prediction-market activities. If the federal framework prevails, platforms may enjoy greater regulatory consistency and a more predictable path to liquidity and product expansion. If state authorities maintain leverage, platforms could face continued licensing costs, compliance fragmentation, or even restricted access in certain jurisdictions.

Investors and builders should watch for regulatory clarity on several fronts: any court rulings that define the scope of the CFTC’s authority; potential settlements or settlements-in-principle between states and platforms; and any federal regulatory updates or guidance that further delineate permissible activities, licensing requirements, or safeguards against market manipulation. The coming months are likely to reveal how much of the current tension is strategic posturing and how much will translate into concrete, enforceable rules for prediction markets.

Readers should stay alert to evolving legal decisions, policy statements from the CFTC, and any new guidance that could influence platform viability, user participation, and the speed at which prediction-market products can scale across borders.

A regulatory clash over prediction markets has intensified as U.S. political signals converge with ongoing state enforcement actions. President Donald Trump reaffirmed that the Commodity Futures Trading Commission (CFTC) has exclusive authority over prediction markets, arguing that federal oversight should be maintained to ensure the industry’s viability. The stance comes at a moment when several states have moved to restrict or challenge platforms such as Kalshi, Polymarket, Crypto.com and Robinhood, claiming they operate gambling activities without proper licensing.

Trump, writing on Truth Social, emphasized the need for a unified federal framework and criticized state officials whom he portrayed as attempting to set their own rules for the sector. He asserted that under his leadership the U.S. would establish “the Gold Standard for the States” in this space and warned against “SCUM” he said were trying to shape policy. These remarks illustrate a broader political dynamic around how prediction markets should be regulated in the United States.

Multiple state authorities have argued that prediction markets violate state gambling laws and have moved to shut down or block platforms. In response, Kalshi and Polymarket have pursued litigation against certain state actions, contending that prediction markets fall squarely under the CFTC’s federal remit. The debate centers on whether state enforcement can or should override, or complement, federal regulation in this evolving market segment.

According to Cointelegraph, CFTC Chair Mike Selig has opposed the states’ efforts, arguing that the agency holds exclusive jurisdiction over prediction markets as federally regulated designated contract markets. The CFTC has pursued legal action against several states—Minnesota, Illinois, New York, and Arizona—for attempting to regulate or ban prediction-market activities within their borders.

Trump’s remarks also highlighted personal and familial ties to the sector. His son, Donald Trump Jr., is reportedly invested in and on the advisory board of Polymarket and serves as an adviser to Kalshi, underscoring the high political and commercial stakes surrounding the policy debate. In the days following his initial stance, Trump signaled a more conciliatory view, suggesting the United States risked falling behind if prediction-market platforms are excluded from the regulatory framework.

Beyond the political debate, the regulatory apparatus has taken concrete steps to structure the market. In March, the CFTC established an advisory team to oversee the listing and trading of event contracts and to ensure that participants meet anti-manipulation, surveillance, and market-integrity requirements. The agency has argued that prediction markets fit within the existing derivatives framework under the Commodity Exchange Act, reinforcing the argument for federal oversight rather than a patchwork of state rules.

Key takeaways

• President Trump reaffirmed the CFTC’s exclusive authority over prediction markets, framing federal oversight as essential to industry integrity and competitiveness.
• State regulators have pursued licensing actions, cease-and-desist orders, or bans against platforms, arguing that prediction markets operate as unlicensed gambling in their jurisdictions.
• The CFTC contends it possesses exclusive jurisdiction over prediction markets as federally regulated markets, a position supported by statements from CFTC leadership cited by Cointelegraph.
• Kalshi and Polymarket have challenged state actions in court, while Trump’s stance intersects with his family’s involvement in these platforms, signaling heightened political risk for the sector.
• March saw the CFTC establish an advisory team to govern listing and trading of event contracts and to uphold market integrity within the existing derivatives framework.

Federal jurisdiction, design markets, and enforcement posture

The central legal question concerns whether prediction markets operate primarily under federal derivatives regulation or are governed by a mosaic of state gambling laws. Proponents of federal control argue that prediction contracts are designated contract markets within the CFTC’s remit, and therefore fall under federal oversight. Critics, however, note that states have traditionally licensed and regulated gambling activities, and they have moved to apply local rules to prediction-market platforms that operate across state lines. This tension is being resolved, in part, through the CFTC’s insistence on its “exclusive jurisdiction” and the use of federal enforcement tools where states seek to assert their own regulations.

As noted by Cointelegraph, CFTC leadership has repeatedly defended the agency’s mandate in the face of state challenges. The agency has publicly pursued litigation against several states, including Minnesota, Illinois, New York, and Arizona, to counter state measures aimed at restricting or banning prediction markets. The outcome of these disputes could significantly shape how platforms structure their operations, pursue licensing where required, and design compliance programs to satisfy both federal and state regulators.

State actions versus platform adaptations and corporate ties

State authorities maintain that prediction markets operate outside licensed gambling frameworks and therefore require state authorization or prohibition. In response, platforms like Kalshi and Polymarket have contested such actions in court, asserting that they are regulated by the CFTC as designated contract markets under federal law. The legal clash reflects broader concerns about consumer protection, market integrity, and anti-manipulation standards in a rapidly evolving segment that blends financial contracts with real-world event outcomes.

The political dimension is amplified by ties between the platforms and political figures. Trump Jr.’s involvement with Polymarket and Kalshi, coupled with the former president’s shifting rhetoric, underscores a policy debate that intersects with campaign dynamics, regulatory philosophy, and the potential for regulatory alignment with broader U.S. financial-market governance. Observers note that how Congress, the executive branch, and the courts calibrate federal versus state authority will carry implications for licensing regimes, compliance burdens, and cross-border operations of prediction-platforms and related services.

Policy context, risk considerations, and market structure implications

The regulatory trajectory surrounding prediction markets sits at the intersection of several compatibility and enforcement considerations. Analysts will be watching for alignment with broader national and international regulatory frameworks, including how MiCA-style harmonization concepts could influence cross-border activity, and how U.S. agencies (including the SEC, CFTC, and DOJ) coordinate on enforcement priorities. Compliance programs for prediction-market operators must address AML/KYC requirements, anti-manipulation controls, and surveillance capabilities, while licensing regimes continue to evolve at the state and federal levels. The evolving posture also raises questions about how stablecoins, banking access, and payment rails intersect with regulatory expectations for risk management and consumer protection in prediction markets.

Regulatory clarity remains critical for institutional participants, exchanges, and financial-service providers seeking to operate or partner with prediction-market platforms. The balance between safeguarding market integrity and fostering innovation will inform licensing approaches, reporting obligations, and cross-border service provisions in a sector that continues to attract regulatory scrutiny.

Looking ahead, observers should monitor the outcome of state actions against platforms, ongoing court challenges, and any potential federal rulemaking or guidance from the CFTC that could further delineate the boundaries between federal authority and state regulation. The unfolding legal and regulatory narrative will likely influence how these markets evolve, how platforms structure compliance programs, and how traditional financial institutions assess risk and opportunity in this frontier area.

As the regulatory debate continues, the next steps—whether through court rulings, new guidance, or settlements—will shape the trajectory of prediction markets in the United States and their integration with broader financial-market infrastructure.

Liquid, a multi-asset trading platform, has launched a trading app that lets users execute trades directly inside OpenAI ChatGPT and Anthropic Claude across crypto, equities, foreign exchange markets and prediction markets.

According to the company, the Co-Invest app’s users can fund accounts, analyze positions and place trades without leaving the chat interface. Liquid said the platform routes orders through venues including Hyperliquid, Lighter and Ostium.

Liquid said Co-Invest supports trading across more than 500 markets, including pre-IPO secondaries and positions on Polymarket. The company said that its platform has processed more than $3 billion in trading volume since launching in August 2025 and currently serves roughly 40,000 users.

In a blog post accompanying the launch, Liquid founder Franklyn Wang said the company considers AI as a tool for reducing informational asymmetries in financial markets, arguing that conversational AI could reshape how retail investors allocate capital.

“Co-Invest is not just another financial product,” Wang wrote. “It marks a shift from human-limited capital allocation to intelligence-augmented capital allocation.”

Related: AI agents must be treated as untrusted systems: Researchers

Crypto companies move to expand infrastructure for AI-driven payments, transactions

Crypto and payments companies are increasingly building out infrastructure that allows AI systems to autonomously hold funds, make payments and interact with crypto services.

In March, Visa launched a tool for programmatic AI payments, while Stripe-backed Tempo introduced a payments protocol focused on machine-driven transactions. That same month, MoonPay released an open-source wallet standard that allows AI agents hold funds and execute transactions across blockchains, including tools for wallet storage, transaction signing and spending controls.

Earlier this month, Amazon Web Services integrated Coinbase’s x402 payments protocol into its Bedrock AgentCore platform, allowing AI agents to make USDC micropayments and access services through crypto payment rails.

That protocol also added batch settlement in May, a feature intended to reduce the cost of high-frequency AI agent payments by allowing small transactions to settle later in bulk. According to Base creator Jesse Pollak, the update enables micropayments of less than $0.0001 for services such as compute and AI inference.

The rise of AI infrastructure across crypto has also begun reshaping hiring and operations across the industry. Companies including Kraken, Coinbase, Gemini, Crypto.com, Block and Dune have all announced layoffs or restructuring efforts this year tied in part to increased use of AI and automation.

Source: Brian Armstrong

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Hong Kong authorities plan to introduce new licensing rules for virtual asset advisory and management service providers as the city expands oversight of its digital asset market.

The Financial Services and the Treasury Bureau and the Securities and Futures Commission (SFC) published consultation conclusions on Tuesday. The paper covers proposed rules for firms that give virtual asset investment advice or manage virtual asset portfolios. The SFC said the consultation followed an earlier paper launched on December 24, 2025.

Hong Kong expands virtual asset rules

The proposed framework would bring virtual asset advisory and management services under formal licensing. The move would extend regulation beyond trading platforms, custody services, and stablecoin issuers.

Authorities said the proposal received broad support from the market. The consultation drew 51 submissions from market participants, industry groups, chambers of commerce, and professional bodies.

The new rules will follow the principle of “same business, same risks, same rules.” Under that model, virtual asset advisory services will align with Type 4 regulated activity under the Securities and Futures Ordinance.

Virtual asset management services will align with Type 9 regulated activity. This means firms managing virtual asset portfolios would face rules similar to traditional asset managers.

The authorities aim to submit the legislative proposals to the Legislative Council in 2026. The planned rules would create separate regimes for advisory and management services.

Secretary for Financial Services and the Treasury Christopher Hui Ching-yu said the proposal forms part of Hong Kong’s wider digital asset policy. He said Policy Statement 2.0, released in June last year, set out the goal of supporting responsible financial innovation while improving risk controls and investor protection.

Hui said the new rules, together with existing regimes for virtual asset trading platforms and stablecoin issuers, would help cover the main parts of the digital asset market.

SFC chief executive Julia Leung Fung-yee said the consultation conclusion marks “the final step” in refining Hong Kong’s digital asset regulatory framework. She said the regime would match traditional financial service standards and promote responsible innovation.

SFC urges early talks with firms

The SFC encouraged firms already offering virtual asset advisory or management services to contact the regulator early. It also asked firms planning to enter the market to begin pre-application talks.

The regulator said early discussions would help service providers understand the proposed licensing process. It would also help firms prepare for compliance before the new rules take effect.

The proposed regime adds another layer to Hong Kong’s digital asset policy. It would give regulators oversight of trading, custody, advice, and portfolio management under a wider legal structure.

The Philippine digital-asset landscape is entering a new phase of maturity. In a significant development for the country’s growing crypto ecosystem, Binance has announced a strategic partnership with BlockShoals Technologies Inc. under the Philippine Securities and Exchange Commission’s (SEC) Strategic Sandbox, or StratBox, framework.

The collaboration signals more than just another business expansion. It represents a broader shift toward compliance-driven innovation, where global crypto infrastructure and local regulatory oversight work side by side to create a safer and more sustainable environment for digital-asset participation.

A New Era of Responsible Crypto Innovation

The Philippine SEC’s StratBox framework was created to provide a controlled and supervised environment where financial technologies can be tested responsibly before large-scale deployment. Instead of allowing unrestricted experimentation, the sandbox approach encourages innovation while maintaining strong investor protection standards and regulatory accountability.

Under this arrangement, BlockShoals becomes the approved local participant operating within the SEC’s Crypto Asset Intermediary framework. Meanwhile, Binance contributes its global infrastructure, operational expertise, cybersecurity systems, liquidity architecture, and compliance capabilities developed across multiple regulated jurisdictions worldwide.

This structure reflects a growing global trend in crypto regulation: partnerships between internationally established platforms and locally regulated entities.

Rather than bypassing regulation, the partnership embraces it.

Why the Philippines Matters 🌏

The Philippines has consistently ranked among the world’s leading countries for cryptocurrency adoption. A highly digital-native population, strong mobile penetration, widespread use of remittance platforms, and increasing interest in decentralized finance have made the country one of Southeast Asia’s most active crypto markets.

From freelancers accepting stablecoin payments to gamers exploring blockchain economies and young investors entering digital markets, crypto participation in the Philippines is deeply grassroots-driven.

Because of this rapid adoption, regulators face a delicate balancing act:

• Encourage innovation and financial inclusion
• Protect users from fraud and market abuse
• Create clear pathways for legitimate companies
• Prevent the ecosystem from becoming a regulatory gray zone

The Binance–BlockShoals partnership appears designed specifically around that balance.

As Binance APAC Head Seker explained, frameworks like StratBox create opportunities for regulators and industry participants to collaborate constructively while prioritizing market integrity and investor protection.

The Role of BlockShoals

One of the most important aspects of the partnership is that BlockShoals is not merely a technical partner. It is the approved local intermediary operating directly under the SEC’s sandbox framework.

That distinction matters.

For years, one of the largest criticisms of the global crypto industry has been the lack of locally accountable structures. Regulators often struggled with platforms operating across borders without sufficient domestic oversight.

Through this setup:

• BlockShoals provides local accountability and regulatory participation
• Binance contributes technology, operational systems, and global expertise
• The SEC maintains direct supervisory oversight within the sandbox

This creates a more collaborative framework where innovation can happen without sacrificing regulatory visibility.

According to BlockShoals representatives, the objective is to demonstrate that global digital-asset platforms and local regulatory frameworks can coexist constructively instead of operating in opposition.

A Compliance-First Strategy 🛡️

Perhaps the most notable element of the announcement is Binance’s emphasis on a long-term, compliance-first approach.

The crypto industry has often been criticized for prioritizing rapid expansion over regulatory engagement. However, recent years have shown a clear shift among major exchanges toward deeper cooperation with regulators worldwide.

In the Philippines, this partnership signals that Binance is focusing on:

• User protection
• Regulatory transparency
• Market integrity
• Sustainable ecosystem growth
• Secure infrastructure deployment

The sandbox phase is expected to begin during the second half of 2026 and continue for at least two years. That extended timeline highlights the measured nature of the initiative.

Instead of rushing toward mass rollout, the project will evolve gradually through supervised testing phases, milestone evaluations, and market-specific adjustments tailored to Filipino users.

That slower approach may ultimately become one of its greatest strengths.

What This Could Mean for Filipino Users

If successful, the initiative could help establish a more secure and locally adapted digital-asset experience for users in the Philippines.

Potential benefits include:

Improved Regulatory Clarity

Users may gain greater confidence participating in digital assets through platforms operating under recognized local frameworks.

Enhanced Security Standards

Binance’s global cybersecurity systems and operational safeguards could strengthen protections for Philippine users.

Better Localized Services

The sandbox model allows testing of product configurations specifically designed for the Philippine market rather than simply importing global models unchanged.

Stronger Industry Trust

Constructive collaboration between regulators and industry participants may improve public trust in the broader crypto ecosystem.

At the same time, the sandbox structure ensures that regulators can monitor risks carefully before broader deployment occurs.

The Bigger Picture for Southeast Asia

The partnership also reflects Southeast Asia’s growing importance in the global digital economy.

Countries across the region are increasingly experimenting with balanced regulatory approaches rather than outright bans or unrestricted liberalization. Governments recognize both the opportunities and risks associated with digital assets, decentralized finance, and blockchain-based infrastructure.

The Philippines now joins a growing group of markets exploring supervised innovation frameworks that aim to foster responsible growth instead of reactive regulation.

If the Binance–BlockShoals model proves effective, it could influence how other emerging markets structure future crypto oversight frameworks.

Final Introspections

The partnership between Binance and BlockShoals Technologies Inc. represents more than a business collaboration. It reflects a broader evolution in how the crypto industry approaches regulation, accountability, and long-term ecosystem development.

By combining local regulatory participation with global operational expertise, the initiative aims to create a safer and more trusted environment for digital-asset participation in the Philippines.

For a country already recognized as one of the world’s most active crypto communities, this could mark the beginning of a more mature and institutionally integrated phase of digital-asset adoption.

The next chapter of Philippine crypto may not be defined by hype alone — but by responsible innovation built on trust, transparency, and collaboration. 🚀

SOURCE:

Binance Report

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US President Donald Trump has backed the Commodity Futures Trading Commission as having the “exclusive authority” over prediction markets, as state regulators’ action against the platforms mounts.

“It is critically important that the CFTC’s exclusive authority over Prediction Markets is maintained, and that they will thrive,” Trump posted to his social media platform Truth Social on Tuesday.

Trump also took aim at several officials whose states have launched legal action against prediction markets, including Kalshi, Polymarket, Crypto.com and Robinhood.

“Under my leadership, we are setting ‘rules of the road’ that are the Gold Standard for the States,” Trump wrote. “We cannot have SCUM like Chris Christie, Letitia James, Tim Walz, and JB Pritzker setting the rules!”

Source: Donald Trump

Multiple state authorities have argued that prediction markets are violating state laws by offering gambling without a license, and have sued or issued cease-and-desist orders to multiple platforms.

Prediction markets such as Kalshi have sued various state authorities to fend off legal action, claiming it is regulated solely by the CFTC.

CFTC Chair Mike Selig has also opposed the states, arguing his agency has “exclusive jurisdiction” over prediction markets as federally regulated designated contract markets.

The agency has sued several states, including Minnesota, Illinois, New York and Arizona for taking action against prediction markets.

Trump said in his post that “other Countries are after this new form of Financial Market, and we want to remain at the top.”

“It is a major Industry, and we must protect it,” he added.

Last month, Trump told reporters he was “not happy” with prediction markets and was “never much in favor” of them in response to a question about well-timed bets on the platforms on events linked to the Iran war, which has drawn the ire of several Democrats who have called for stricter measures.

Related: Hyperliquid launches prediction markets for real-world events 

Trump, whose son Donald Trump Jr. is invested in and on the advisory board for Polymarket and is also an adviser to Kalshi, softened his stance on prediction markets days later, saying the US would “get left out in the cold” if it didn’t allow the platforms.

In March, the CFTC established an advisory team to oversee the listing and trading of event contracts and to ensure that market participants satisfy anti-manipulation, surveillance and market integrity requirements.

It claimed that prediction markets fall within the CFTC’s existing derivatives framework under the Commodity Exchange Act.

Magazine: How to fix suspected insider trading on Polymarket and Kalshi

Coinbase and CEO Brian Armstrong are bankrolling a rapidly expanding pro-crypto political machine, pouring tens of millions of dollars into Fairshake as Washington’s 2026 election fight over digital assets intensifies.

Coinbase and Armstrong are helping assemble what they describe as an “8-figure political war chest” by routing $25.5 million into Fairshake, a crypto-focused super PAC backing pro-digital asset candidates in what the exchange calls the industry’s “most consequential” U.S. election yet. According to Fairshake spokesperson Josh Vlasto, Coinbase contributed $24.5 million while Armstrong personally donated another $1 million, putting the exchange and its chief executive behind roughly one-third of the PAC’s current $85 million haul.

Fairshake, which supports crypto-friendly candidates from both parties, has emerged as the central political vehicle for the sector, drawing contributions from exchanges, venture firms and token issuers as they scramble to influence how Washington sets the rules for stablecoins, market structure and digital asset custody. As one crypto trader reacting to the latest numbers put it on X, “they’re playing the long game,” arguing that “policy could shift everything for crypto.”

Coinbase cashes in on political clout

The U.S.-based exchange has quietly become Fairshake’s dominant patron, with its latest $24.5 million check making it the PAC’s largest single donor this cycle, ahead of other big names such as Ripple and venture backers. In addition to Armstrong’s $1 million personal contribution, Coinbase has previously acknowledged Fairshake support in a December blog post, casting the PAC as part of a broader push to secure “clear rules of the road” for digital assets in the U.S. market.

Fairshake and affiliated committees Protect Progress and Defend American Jobs have collectively raised more than $85 million since launch, according to public disclosures and reporting from outlets including Axios and Bloomberg. A16z has chipped in at least $20 million, Electric Capital added $500,000, while Ripple has committed more than $20 million in this cycle alone, on top of an earlier $20 million tranche disclosed in December.

That capital is already being deployed aggressively. Fairshake and its allies have spent around $20 million in recent primary races across Georgia, Kentucky and Alabama, targeting candidates seen as hostile to the sector and backing those prepared to support more permissive crypto policy.

Crypto’s regulatory endgame in Washington

The industry’s political spending spree comes as Congress moves closer to a comprehensive framework for digital assets, with measures like the Senate Agriculture Committee’s CLARITY Act and parallel House market structure bills threatening to harden the regulatory perimeter around trading platforms, stablecoin issuers and token projects. Fairshake’s stated mission is to “support candidates who want to get it right on digital assets,” a euphemism for lawmakers willing to back CFTC-led oversight, friendlier tax treatment and a path to mainstream status for assets like bitcoin, ether and leading stablecoins.

In a wide-ranging discussion about crypto’s next phase, Armstrong has framed 2025–2026 as the moment the asset class moves from “gray market to well‑lit establishment,” explicitly tying that shift to heavy lobbying, campaign donations and the outcome of this election cycle. From PACs like Fairshake to direct outreach to policymakers, crypto firms are betting that writing big checks now will buy them regulatory clarity later, a strategy that has already helped push more than 250 openly pro‑crypto candidates into Congress, according to prior reporting from crypto.news.

The escalation also underscores how tightly politics and markets have fused. In a recent crypto.news feature, Fairshake’s $85 million war chest was described as a “new phase” of engagement, one that can make or break Senate bids with eight‑figure ad blitzes. Another crypto.news analysis detailed how the PAC and its allied committees have since swelled to more than $116 million in cash and commitments for the 2026 midterms, putting crypto on spending par with some of the country’s largest corporate lobbies.

For now, Fairshake’s donors are signaling they are nowhere near done writing checks. Coinbase has already pledged an additional $25 million for 2026, Ripple is layering on fresh $25 million commitments, and a16z plans to add $23 million on top of prior cycles — numbers that suggest the U.S. crypto industry has accepted that its future will be decided not just in markets, but at the ballot box.

Bitcoin briefly reclaimed the $78,000 level in a violent short squeeze that added roughly $30 billion to its market capitalization within an hour, before volatility quickly returned.

Bitcoin (BTC) ripped roughly $1,400 higher in about an hour on Tuesday, spiking back above $78,000 as a wave of forced liquidations flushed out overleveraged shorts and briefly added around $30 billion to the asset’s market value, according to trader Bull Theory. The move pushed Bitcoin back into the upper end of its recent range, where it has oscillated between roughly $75,000 and $80,000 since early May while traders debate whether the next leg is a clean breakout or yet another squeeze-driven head fake.

Bitcoin rips higher, then whipsaws traders

In his post, Bull Theory wrote that “Bitcoin pumped +$1400 in 1 HOUR and back above $78,000 adding $30 BILLION in market cap,” adding that “over $25 MILLION shorts liquidated in the past hour.” That size of liquidations is modest compared to the $140 million-plus in forced flows seen during broader market squeezes over the past month, but concentrated in a one-hour window it is enough to drive a sharp, mechanical move in thin order books.

The broader backdrop remains one of elevated but cooling leverage after a series of squeezes pushed Bitcoin to and through key resistance levels this quarter, including a break above $80,000 earlier in May as ETF inflows and conference-driven hype collided at Consensus 2026 in Miami. Bitcoin’s live price page shows the asset still hovering near the top of its recent range with a market capitalization above $1.5 trillion, underscoring its outsized influence on the wider crypto complex.

Short squeeze mechanics and where price goes next

On derivatives venues, similar episodes of forced buying have repeatedly driven Bitcoin higher as negative funding and crowded short positioning flip into a cascade of liquidations that chase price up the order book. Previous squeezes this cycle wiped out hundreds of millions of dollars in bearish bets in a matter of hours as BTC ripped past $76,000 and then $79,000, before stalling near resistance bands just below $80,600. Crypto.news has documented how these dynamics often leave spot demand lagging behind derivatives-driven spikes, raising the risk that price retraces once the forced flows exhaust.

Reactions to the latest move were predictably split. One trader, MacroPulse, noted that “it just dumped right back down for some reason lol,” capturing the frustration of those whipsawed by 15-minute candles that “would cause anyone to quit,” as another user, Alan Bolton, put it. Others warned that this is “not a good time to leverage; most people fail,” arguing that sharp squeezes can quickly reverse once late longs pile in and market makers fade the move.

Short-squeeze psychology is hardly new to this cycle. Earlier reporting from crypto.news highlighted how Bitcoin’s reclaim of the $79,000 area in April coincided with rising open interest and negative funding rates that signaled “potential for another short squeeze,” with resistance stacked near $85,000 and support closer to $77,000. Another recap detailed how BTC “reclaims $68K amid short liquidations,” showing the same pattern of shorts forced to buy back into strength.

At the time of writing, Bitcoin’s price page on crypto.news shows BTC consolidating just below the intraday highs, with market dominance around 58% and capitalization north of $1.5 trillion. That positioning, combined with prior analyses of Bitcoin “stabilizing at $70K as open interest drops” and setting a base for the next move, suggests that as long as spot demand does not fully disappear, aggressive shorting into support zones may continue to be a risky strategy.

XRP trades near $1.39-$1.47 in late May 2026, down approximately 26% year-to-date and 34% year-on-year despite multiple institutional catalysts that historically would have driven significant price appreciation.

Five-spot (XRP) ETFs are now trading in the US with cumulative inflows of $1.53 billion since the November 2025 launch. Goldman Sachs disclosed a $153.8 million XRP ETF position. The Senate Banking Committee voted to advance the CLARITY Act on May 14, 2026 (15-9 bipartisan). 

Ripple received conditional OCC approval for Ripple National Trust Bank in December 2025 and applied for a Federal Reserve master account. RLUSD stablecoin reached approximately $1.3 billion market cap after expanding to Ethereum Layer 2 networks. Ripple closed approximately 10 institutional deals in early 2026, including a tokenized Treasury pilot with J.P. Morgan, Mastercard, and Ondo Finance on XRPL. Standard Chartered targets $8 by year-end if the CLARITY Act passes the full Senate and ETF inflows reach $10 billion. Bitwise’s Juan Leon projects new all-time highs within 12-18 months. 

Yet XRP price action has been disconnected from these catalysts. The reason matters: XRP price benefits from XRP usage and holding at scale, not from Ripple’s deal pipeline. Most Ripple institutional flow routes through fiat and RLUSD rather than XRP as a bridge currency. The price disconnect is structural rather than temporary. This piece walks through the actual mechanics, the bull case ($8-$15 by 2030), the base case ($3-$6), and the bear case ($1-$2.50), with the specific variables determining outcome.

Why XRP is at $1.42 right now

The current XRP price reflects a structural disconnect between Ripple’s institutional success and XRP token utility that competitor analyses keep missing.

The starting point: XRP reached approximately $3.65 in July 2025, driven by anticipation of CLARITY Act passage, spot XRP ETF launches, and broader institutional adoption. The subsequent decline to current $1.42 levels (60+% drawdown from peak) happened despite Ripple’s continued institutional success across multiple dimensions.

The Ripple institutional wins through 2026: spot XRP ETFs launched in November 2025, with cumulative inflows reaching $1.53 billion by May 2026. Goldman Sachs disclosed a $153.8 million XRP ETF position. Ripple received conditional OCC approval for Ripple National Trust Bank in December 2025. Application filed for Federal Reserve master account. RLUSD stablecoin reached a $1.3 billion market cap. Tokenized Treasury pilot with J.P. Morgan, Mastercard, and Ondo Finance on XRPL. Ripple secured a $200 million financing facility from Neuberger Specialty Finance for institutional brokerage. Approximately 10 institutional deals closed in early 2026.

The structural problem: most of this institutional activity does not generate sustained XRP demand at price-supporting scale. Ripple’s payment corridors largely route through fiat (USD, EUR) and RLUSD stablecoin rather than through XRP as a bridge currency. The institutional ETF flows ($1.53B cumulative) are meaningful, but a fraction of Bitcoin ETF flows ($120B+) that drove BTC’s institutional adoption. The Federal Reserve master account application, if approved, would let Ripple hold RLUSD reserves at the central bank but doesn’t directly create XRP demand.

The XRP utility gap: the original Ripple thesis depended on XRP serving as the universal bridge currency between fiat pairs in cross-border payments. Banks would need XRP to enable transactions, creating sustained institutional demand for the token. The actual deployment has been substantially different.

Banks have largely used Ripple’s payments network through fiat-to-fiat settlement or through stablecoin-mediated transactions rather than XRP-mediated transactions. The demand for XRP that would justify higher prices has not materialized in the way the original thesis required.

The RLUSD competitive dynamic: Ripple’s own RLUSD stablecoin has captured the institutional settlement role that XRP was supposed to serve. RLUSD provides the same cross-border settlement functionality without the volatility risk of XRP. Banks and institutional users prefer stablecoin settlement for accounting and risk management reasons. The result is that Ripple’s own product is fundamentally competing with XRP for the bridge currency use case.

The ETF dynamics: spot XRP ETFs launched with significant initial inflows, but the demand pattern has been more episodic than sustained. Weekly XRP ETF inflows fell from over $200 million in early 2026 to roughly $2 million by the end of March 2026, showing the lumpy and catalyst-dependent nature of institutional XRP demand. Without sustained ETF accumulation, the institutional capital that supports BTC and ETH prices doesn’t reach XRP at comparable scale.

Cathie Wood has raised her long-term Bitcoin forecast to as high as $1.25 million, even as the cryptocurrency trades below key resistance levels during another period of macro uncertainty.

Speaking in a recent interview with Fox Business, the ARK Invest chief executive said institutional demand continues to support the firm’s long-term outlook for Bitcoin. Wood stated that ARK Invest now sees a base-case Bitcoin target of $750,000 over the next five years, while its bull-case scenario projects prices climbing to $1.25 million.

According to Wood, pension funds, asset managers, and corporations are still in the early stages of allocating capital to Bitcoin. She described the cryptocurrency as a new asset class that institutional investors can no longer ignore if they want to improve long-term portfolio returns.

At the same time, Bitcoin remains stuck near the $77,000 range after several failed attempts to reclaim the $80,000 psychological level. Data from crypto.news showed Bitcoin (BTC) price was trading at roughly $77,149 on Tuesday, moving sideways over the past 24 hours. Intraday trading ranged between $76,451 and $77,998, while daily volume also slipped slightly.

Meanwhile, Wood argued that Bitcoin could continue taking market share from gold as younger investors inherit wealth over the coming decades. She also said the asset may gain traction in emerging economies where inflation, corruption, and currency instability continue to pressure local financial systems.

ARK Invest ties Bitcoin forecast to institutional adoption

As crypto.news reported earlier, fresh projections from ARK Invest’s Big Ideas 2026 report offer more detail behind the company’s aggressive Bitcoin outlook. According to figures cited by Forbes, the report estimates Bitcoin’s market capitalization could expand from roughly $2 trillion today to nearly $16 trillion by 2030.

The report also projects annual compound growth of about 63% during the remainder of the decade. ARK Invest attributed the forecast to several factors, including spot Bitcoin ETF demand, corporate treasury adoption, nation-state reserves, and Bitcoin’s use as settlement collateral across financial markets.

Beyond Bitcoin, ARK Invest predicted the wider digital asset sector could grow from around $2.8 trillion to nearly $28 trillion by 2030. The report named Bitcoin, Ethereum, and Solana as the dominant networks expected to capture most of that expansion.

Recent trading activity from ARK Invest has also reinforced the firm’s crypto-focused strategy. Earlier this month, the investment company purchased about $4.4 million worth of shares in Bullish after the exchange operator’s stock declined for five straight trading sessions before rebounding slightly.

Market reports showed ARK Invest added Bullish shares across its ARK Innovation ETF, ARK Next Generation Internet ETF, and ARK Fintech Innovation ETF products over two trading days.

Bitcoin faces pressure from geopolitics and Fed concerns

Despite Wood’s optimistic forecast, several market risks continue to weigh on Bitcoin in the short term. According to a May 26 report from The New York Times, investors remain cautious after the latest self-defense strikes linked to the ongoing U.S.-Iran conflict added fresh volatility across global markets.

Spot Bitcoin ETF outflows have also continued to pressure sentiment. At the same time, traders are closely watching the Federal Reserve after speculation grew that incoming Fed Chair Kevin Warsh could support additional rate hikes during his first policy meetings.

Elsewhere, some crypto investors continue to maintain longer-term bullish targets similar to Wood’s outlook. Public figures, including Robert Kiyosaki, Arthur Hayes, and Brian Armstrong, have previously discussed scenarios where Bitcoin could eventually reach the $1 million level during a future market cycle.

Meanwhile, Anthony Scaramucci recently told investors he still expects Bitcoin to rally later in 2026 if the traditional four-year crypto cycle remains intact.