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CFTC Regulatory Shift Could Open Greenfield Growth for Coinbase Prediction Markets: Analyst

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The newly appointed Chairman of the U.S. Commodity Futures Trading Commission (CFTC), Michael Selig, has signaled a major shift toward clearer federal oversight of crypto-linked prediction markets, according to a report from Clear Street analyst Owen Lau.

In his first public remarks as CFTC Chair, Selig outlines a vision of closer coordination with the Securities and Exchange Commission (SEC) to unlock innovation across blockchain-based markets.

Speaking at a joint SEC–CFTC Harmonization Event, Selig said the agency would prioritize a unified federal approach rather than pursuing parallel regulatory initiatives.

“The objective is to implement clear and principled rules of the road for crypto,” Lau wrote.

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“Project Crypto” Introduced Ahead of Congressional Action

Selig’s comments come as lawmakers continue to debate broader market structure legislation, which would determine whether digital tokens fall under securities or commodities regulation and clarify jurisdictional boundaries between the SEC and the CFTC.

Clear Street notes that the chairman’s initiative — referred to as “Project Crypto” — arrives even before Congress has finalized agreement on a market structure bill.

Lau said the move also outshines the Senate Agriculture Committee’s advancement of the “Digital Commodity Intermediaries Act,” which passed with partisan backing on the same day.

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“This is the type of leadership the industry has been seeking for years,” Lau said.

CFTC Moves to Withdraw Restrictions on Event Contracts

More significantly, Selig indicated the CFTC is prepared to take greater control over the regulatory uncertainty surrounding prediction markets, a sector that has faced mounting litigation and unclear oversight.

Lau highlighted that Selig directed agency staff to withdraw the 2024 event contracts rule proposal, which would have banned political- and sports-related event contracts. He also ordered the withdrawal of a 2025 staff advisory cautioning firms against offering sports-related contracts amid ongoing court disputes.

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Clear Street believes Selig recognizes that the previous hands-off posture has contributed to legal uncertainty rather than market stability.

Drafting New Rules and Defending CFTC Jurisdiction

To promote innovation and competition, Selig instructed staff to draft a new rulemaking framework for event contracts and reassess the agency’s participation in court matters currently pending.

Lau said it is increasingly likely the CFTC will defend its exclusive jurisdiction over commodity derivatives, including sports-related event contracts, when jurisdictional disputes arise.

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“These actions could strengthen the case that prediction market platforms have been making to the courts,” Lau wrote.

Coinbase and Circle Seen as Potential Beneficiaries

Clear Street added that companies such as Coinbase (COIN) and Circle (CRCL) could benefit from the regulatory developments, calling prediction markets a “greenfield opportunity.”

Coinbase recently launched prediction markets across all 50 U.S. states, while Circle’s USDC stablecoin is widely used on crypto-native platforms such as Polymarket.

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While uncertainty remains over whether courts will uphold future CFTC rulemaking, Lau said the shift represents a positive development for the growing prediction market ecosystem.

The post CFTC Regulatory Shift Could Open Greenfield Growth for Coinbase Prediction Markets: Analyst appeared first on Cryptonews.

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Crypto World

SEC crypo safe harbor framework reaches White House

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SEC crypo safe harbor framework reaches White House

Progress on a potential crypto safe harbor framework is now entering a key regulatory phase as it is up for White review.

Summary

  • SEC has submitted its crypto safe harbor proposal to the White House for review ahead of public release.
  • Framework introduces startup and fundraising exemptions along with a pathway for assets to exit securities classification.

US Securities and Exchange Commission Chair Paul Atkins said the agency’s proposed “Regulation Crypto Assets” package has been submitted to the Office of Information and Regulatory Affairs, placing it under White House review ahead of publication.

“We will have reg crypto that we will be proposing here shortly. It’s in fact at OIRA right now, which is the next step before being published,” Atkins said during remarks at the Digital Assets and Emerging Technology Policy Summit.

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The regulatory process now moves through OIRA review before publication in the Federal Register, where it will be opened for public comment. That stage often determines how proposals are adjusted before any final adoption.

As previously reported by crypto.news, Atkins first detailed plans for the framework earlier this month. The proposal outlines a three-part framework designed to address how crypto projects raise capital and transition out of securities classification. 

One component introduces a startup exemption, allowing early-stage ventures to raise funds over a four-year period with lighter disclosure requirements. Another creates a fundraising exemption that permits issuers to raise capital within a 12-month window while maintaining access to other registration exemptions under federal securities laws.

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A central feature of the package is an investment contract safe harbor. Under this approach, certain digital assets could fall outside securities classification once project teams step back from managerial roles that were previously promised or implied during fundraising.

Atkins indicated that parts of the framework are still being refined, with the SEC seeking industry input to ensure the rules are workable in practice. Additional elements, including exemptive relief and safe harbor protections, are being built into the proposal as the agency shapes the final structure.

Meanwhile, the commission, led by Paul Atkins, has also stepped up efforts to ease its enforcement-first approach and clarify other parts of the crypto market.

The SEC has signed a Memorandum of Understanding with the Commodity Futures Trading Commission. Both agencies have agreed to eliminate any friction that could hamper rule-making in the future.

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Lawmakers are also negotiating whether the Digital Asset Market Clarity Act should allow stablecoin yields.

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Grayscale Says Bitcoin’s Quantum Problem is Mostly a Social One

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Grayscale Says Bitcoin’s Quantum Problem is Mostly a Social One

The challenge to solving the quantum threat to Bitcoin could be more social than technical, according to Grayscale’s head of research, especially if the community fails to come to an agreement on certain contentious issues.

Google released a paper that shook the crypto industry on March 30, suggesting that a quantum computer could potentially crack the cryptography protecting Bitcoin (BTC) using far fewer resources than previously thought.

Grayscale head of research Zach Pandl, however, suggested the problem for Bitcoin doesn’t come from its technical solution, as “bitcoin has lower risk than other cryptocurrencies” because it uses a UTXO model and proof-of-work consensus, does not have native smart contracts and certain address types are not quantum vulnerable.

Instead, the challenge would be for the community to reach a decision on the way forward, said Pandl. 

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The Bitcoin community has been fiercely debating what to do about old dormant coins, particularly the roughly 1.7 million BTC locked in early P2PK addresses, including Satoshi’s estimated 1 million BTC stash, currently worth about $68 billion. 

The Bitcoin community has three options 

The Bitcoin community needs to decide what to do about coins where the private key has been lost or is otherwise inaccessible, wrote Pandl. 

They have three main options: burning the coins, deliberately slowing their release by limiting the rate of spending from vulnerable addresses or doing nothing. 

“All are conceptually doable, but the challenge is reaching a decision, and the Bitcoin community has a history of contentious debates over protocol changes, including last year’s dispute around image data stored in blocks.”

Pandl was referring to a big fracas that erupted in 2023 over the use of blockspace for Bitcoin Ordinals, technology that enables inscribing data such as text and images to a satoshi, the smallest unit of Bitcoin. 

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Two years later, the debate may have quietened down, but the two sides continue to hold opposing views.

Related: Researchers say quantum computers could, in theory, be ready by 2030

About 1.7 million BTC is vulnerable to the quantum threat. Source: Grayscale

No threat now but time to get started

Pandl cautioned that it was “time to get started” and that blockchains need to adopt post-quantum cryptography, echoing the sentiment from Google. 

Both Solana and the XRP Ledger are already experimenting with post-quantum cryptography, wrote Pandl. Meanwhile, the Ethereum Foundation released its post-quantum roadmap in February.

Pandl concluded that investors “should not fret” for now, but it is time to accelerate efforts to prepare for our post-quantum future. 

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“In our view, there is no security threat to public blockchains from quantum computers today.”

Magazine: Nobody knows if quantum secure cryptography will even work