TLDR:

• Michael Selig solely runs the CFTC, gaining unmatched power over crypto markets.
• CFTC approved crypto perpetual futures, triggering CME Group’s stock decline and criticism.
• Lawmakers from both parties push Trump to nominate additional CFTC commissioners.
• Staff buyouts and unrest grow as CFTC’s crypto oversight role expands rapidly.

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CFTC Chair Michael Selig is consolidating regulatory control over crypto and prediction markets, drawing both industry praise and rising concern in Washington.

As the agency’s sole commissioner, Selig now holds outsized influence over digital assets, derivatives, and platforms like Kalshi and Polymarket.

Solo Chair Reshapes CFTC Agenda

Selig has served less than six months as CFTC chair, yet his impact is already substantial. He operates as the only sitting member of what should be a five-person bipartisan commission.

This unusual arrangement gives him unilateral authority over crypto products, prediction markets, and oil futures.

His approach favors faster approvals and lighter enforcement than his predecessors. Selig recently approved crypto perpetual futures, a first for U.S. markets. These products let traders bet indefinitely on asset prices without expiration dates.

The approval rattled CME Group, whose stock dropped after the decision. Speaking on CNBC, CME CEO Terry Duffy warned that the move “could be a disaster waiting to happen.” Despite the pushback, the CFTC defended the decision as part of bringing offshore activity onshore.

Selig also backed the Winklevoss twins in their effort to vacate a Biden-era settlement. The CFTC released internal documents tied to the case, unsettling some staff members.

Commenting on the disclosures, attorney Jack Baughman, who represented Gemini, said “this sort of information should be made available in every case, in my view.”

Lawmakers from both parties are now urging Trump to nominate additional commissioners. Senate Agriculture Chair John Boozman and House Agriculture Chair GT Thompson back this push.

Sen. Elissa Slotkin voiced her own concern, stating bluntly, “We’ve got one guy who has clear leanings toward the industry. I’ve got a problem with that.”

Staff Unrest Grows Amid Crypto Bill Push

Internal tension at the CFTC has intensified alongside Selig’s expanding influence. A current official described the agency as lacking the operational capacity to oversee crypto.

CFTC spokesperson Brooke Nethercott rejected that characterization, calling it “a despicable description of our dedicated civil servants.”

A fresh round of buyout offers has hit the Division of Market Oversight particularly hard. This division traditionally handles derivatives exchange oversight and trading venue rules.

Reflecting on the broader pattern, one former official summarized the mood simply: “It’s death by a thousand cuts.”

Notably, a recent prediction market rule proposal bypassed this division entirely. Instead, the general counsel’s office led the drafting process this time.

Nethercott pushed back on suggestions of dysfunction, saying it would be false to “imply anything in the CFTC is done in a vacuum.”

Congress is weighing a digital assets bill that would formally expand CFTC authority. This legislation could make Selig a central regulator for the $2 trillion crypto market. Companies ranging from Coinbase to World Liberty Financial would fall under this oversight.

Former CFTC chair Timothy Massad criticized the agency’s current trajectory sharply, comparing it to a once-reliable engine now running off the rails. Still, industry voices like Chris Perkins remain enthusiastic, declaring of Selig’s approach, “He’s doing God’s work.”

Crypto traders, having seen bitcoin BTC$62,895.02, the largest cryptocurrency, bounce overnight to $64,000 from recent lows under $60,000, may be wondering whether the bottom has been hit and a fresh bull run has started.

There is a simple signal to get that confirmation. Right now, it is saying the rebound has not started.

That signal comes from the widely followed momentum gauge called the relative strength index, or RSI. The measure can range from 0 to 100. Readings above 70 indicate that an asset is running hot and potentially overbought, while readings below 30 suggest the opposite. Between those extremes, specific levels often emerge as dividing lines between bullish and bearish environments.

For the bitcoin price, the line is at 41.5, according to crypto data analytics platform Material Indicators. Above that level, BTC has historically had a stronger argument for being in a bullish macro trend. Below it, bearish pressure tends to dominate.

“Right now, Bitcoin is below it, and still trending down,” Keith Alan, an analyst at Material Indicators, said in an email. “That does not mean price has to collapse, but it does mean the burden of proof is still on the bulls.”

Federated Hermes has launched a new money market fund designed for stablecoin reserve management, introducing a product that can be used by payment stablecoin issuers operating under the GENIUS Act framework.

According to a July 10 announcement, the newly introduced Federated Hermes Money Market Management Digital Treasury Fund, trading under the ticker OFFXX, has been structured to meet the reserve asset requirements that payment stablecoin issuers must maintain under the Guiding and Establishing National Innovation for U.S. Stablecoins Act, or GENIUS Act.

The launch comes as the stablecoin industry moves deeper into the implementation phase of the GENIUS Act, which established a federal framework for payment stablecoins in July 2025 and requires issuers to maintain 1:1 backing with high quality liquid assets.

Under details released by Federated Hermes, the fund seeks to generate income while preserving principal stability through investments in U.S. dollar cash, U.S. Treasury securities with maturities of 93 days or less, and overnight repurchase agreements backed entirely by Treasury securities.

The company said the fund intends to operate in compliance with Rule 2a-7 of the Investment Company Act of 1940, the regulatory framework that governs money market funds.

While the Reserve Shares themselves do not use blockchain technology, Federated Hermes said the product has been created primarily for participants in the digital asset sector. The shares can be purchased and held by individuals, institutional investors, and payment stablecoin issuers either directly or through intermediaries.

In some cases, those intermediaries may use blockchain systems to maintain ownership records for customers. Federated Hermes also said it could explore using blockchain technology to record ownership of Reserve Shares or future share classes.

Growing regulatory requirements are creating demand for reserve-focused products. Proposed rules issued by FinCEN and OFAC under the GENIUS Act would subject permitted payment stablecoin issuers to anti-money laundering and sanctions compliance obligations similar to those applied to other financial institutions, which cover customer verification, transaction monitoring, sanctions screening, and suspicious activity reporting.

Federated Hermes expands digital asset offering

Drawing on more than five decades of experience in liquidity management, Federated Hermes appointed Susan Hill, head of the firm’s government liquidity group, and senior portfolio manager John Wyda to oversee the fund.

As of March 31, 2026, Federated Hermes managed $684.7 billion in money market assets and $907.1 billion in total assets under management, according to company figures.

“Liquidity management is a core business of Federated Hermes and we offer one of the largest menus of targeted solutions,” said Paul A. Uhlman, president and chief executive officer of the Federated Advisory Companies.

“Federated Hermes is proud to advance strategic initiatives that bring together the strength of money market investments and our management expertise.”

He said the firm continues to evaluate opportunities tied to blockchain technology as interest in digital assets and tokenized money market products grows.

Federal agencies are still finalizing several GENIUS Act rules, with implementation deadlines continuing through 2026. As issuers prepare for reserve, compliance, and reporting obligations under the law, products built specifically around eligible reserve assets are beginning to enter the market.

Ethereum remained under pressure on June 12 as geopolitical risk, ETF outflows, and weak technical structure kept ETH close to key support.

Ethereum traded at $1,652.70, down 0.4% over 24 hours, according to crypto.news market data. The token recorded $12.28 billion in daily trading volume, while its market cap stood near $199.23 billion.

ETH traded between $1,632.77 and $1,687.85 during the latest 24-hour period. The token was also down 4.91% over seven days, showing that short-term weakness remains in place.

The current move follows a sharp June drawdown across the crypto market. Ethereum recently touched the $1,500 area after losing support near $2,000, a level that had acted as a major marker for traders.

The daily chart still shows a clear downtrend. ETH has formed lower highs since its previous highs near the $4,500 to $5,000 region, and the latest price action shows consolidation near the lower part of the range.

Iran risk and Fed pressure weigh on Ethereum

Ethereum’s latest weakness came as U.S. military action against Iran pushed traders away from higher-risk assets. The conflict has lifted demand for the U.S. dollar and safe-haven positions, while crypto markets have faced liquidations.

Higher energy prices also add pressure because they can keep inflation elevated. That matters for Ethereum because sticky inflation reduces the chance of easier Federal Reserve policy.

A hawkish Federal Reserve usually weighs on crypto. Higher rates make speculative assets less attractive because investors can earn safer yields elsewhere.

As previously reported by crypto.news, the June crypto crash came from several pressures hitting the market at once. Those included a hawkish Fed, U.S.-Iran tensions, ETF outflows, and a leverage unwind.

For Ethereum, that mix has been hard to absorb. ETH often moves with higher beta than Bitcoin, meaning it can fall faster when traders reduce risk.

Ethereum ETF outflows add market pressure

Spot Ethereum ETFs recorded $15.89 million in net outflows on June 11, marking the third straight day of withdrawals, according to SoSoValue data. 

ETF outflows matter because these products can act as a source of spot demand. When flows turn negative, that demand weakens and can add sell pressure during unstable markets.

As previously reported, spot Ethereum ETFs saw $540 million in outflows in May, followed by another $168 million in early June. That removed a major source of support as ETH broke several key levels.

The outflow trend has also kept institutional demand in focus. Ethereum bulls need ETF flows to stabilize if ETH is to build a stronger recovery from the $1,500 to $1,650 range.

The latest ETF data does not mean all buyers have left. BlackRock’s ETHA still recorded inflows on June 11, but broader net flows remained negative across the full group.

Analysts split on accumulation and downside risk

Some analysts argue that Ethereum has entered a long-term accumulation zone. Ali Martinez pointed to Ethereum’s MVRV pricing band and said ETH is trading below the 0.8 MVRV band, which has often marked undervalued conditions.

“Ethereum below the 0.8 MVRV Pricing Band is a high-probability long-term accumulation zone,” said analyst Ali Charts.

Ali also noted that Ethereum’s Delta Price sits near $700. The metric compares investor cost basis with miner production cost and has historically appeared near deep cycle lows.

That view does not remove short-term risk. Daan Crypto Trades said ETH still needs to retake its range low before the structure becomes more constructive.

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“Still watching for that range low retake before getting excited again,” said analyst Daan Crypto Trades.

He added that the current move still looks like another breakdown in a larger trend unless ETH reclaims the lost range. That view keeps attention on the $1,750 to $1,800 area.

Ethereum technical setup remains weak

Ethereum is trying to hold the $1,650 area. If sellers break that level, the next support zone sits near $1,550 to $1,500.

A deeper move below $1,500 could bring the $1,400 level into focus. Some analysts have warned that failure to hold that region may increase the risk of a move toward $1,000 to $1,100.

On the upside, ETH needs to reclaim $1,750 to $1,800 first. A stronger recovery would require a move back above $2,000, where the latest breakdown accelerated.

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The BBP indicator remains negative near -149.38, showing that sellers still control the daily chart. However, the red bars have become smaller than the sharp bearish spike seen earlier in June, which suggests selling pressure has eased slightly.

The RSI stands near 30.50, while its signal line is near 25.10. That places ETH close to oversold territory, which can support a short-term relief bounce if buyers defend support.

A stronger signal would require RSI to move back above 40 and then toward 50. Until then, momentum remains weak.

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

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Former U.S. Commodity Futures Trading Commission Chair Gary Gensler has joined a growing list of groups challenging sports prediction markets, arguing in a new court filing that Congress never intended federal derivatives laws to cover sports betting contracts.

According to a filing submitted Thursday to the Sixth Circuit Court of Appeals, Gensler said sports-related event contracts offered by prediction market platforms such as Kalshi do not meet the definition of swaps under the Dodd-Frank Act because they are not designed to hedge economic risk.

The filing adds another voice to an intensifying legal battle over whether sports prediction markets should be regulated by the CFTC or treated as gambling products subject to state gaming laws. Tribal organizations, the Indian Gaming Association, the American Gaming Association, and Better Markets also filed amicus briefs supporting state authority in the case.

At the center of the dispute is a lawsuit Kalshi filed against Ohio after the state challenged the company’s sports-related contracts. A federal judge ruled against Kalshi in March, and the matter is now before the appellate court.

“Congress did not include sports betting contracts within the statutory Dodd-Frank definition of swap,” Gensler wrote in the filing. 

“Such contracts do not fit the CEA’s purpose or the statutory language defining swap, which focus on hedging economic risk. Sports bets are very rarely, if ever, about hedging.”

His filing argued that Congress designed swaps as tools for managing commercial and economic risks rather than for wagering on sporting outcomes.

The latest filing arrives as federal regulators continue shaping rules for prediction markets. Earlier this month, the CFTC proposed a framework that would review event contracts individually rather than banning entire categories of markets. 

As previously reported by crypto.news, the proposal could subject some sports contracts, including markets tied to player injuries and in-game events, to additional scrutiny.

Courts weigh federal authority against state gaming laws

Questions over who controls prediction markets have triggered lawsuits across the country.

Several states, including Ohio, Nevada, New Jersey, Maryland, Montana, and Illinois, have challenged prediction market operators, arguing that some sports contracts function as gambling products and should comply with state licensing, tax, and consumer protection requirements.

Meanwhile, prediction market firms have maintained that their products are permitted under the Commodity Exchange Act and fall under CFTC oversight.

Challenging the regulator’s recent position, Gensler argued that the agency’s interpretation stretches beyond what Congress intended when it expanded derivatives regulation through Dodd-Frank. 

“The CFTC now posits hedging theories for some sports bets that are at best only tenuously connected to reliable hedges of commercial risks,” the filing said. 

“That connection, however, is crucial, as Congress included only those event contracts that hedge risks in a manner similar to a swap and are sufficiently associated with a potential financial, economic, or commercial consequence.”

The agency itself has taken the opposite position. In an amicus brief filed last month, the CFTC argued that event contracts traded on designated contract markets under its supervision should be treated as swaps and remain within federal jurisdiction.

Court decisions have so far produced mixed results. The Third Circuit Court of Appeals ruled in April that New Jersey could not stop prediction markets from operating, while judges on the Ninth Circuit appeared more receptive to arguments from state regulators in a separate case.

Legal uncertainty has persisted even as the CFTC advances a federal rulemaking process. The agency received more than 1,500 public comments by early May and later reported receiving more than 3,000 submissions covering insider trading concerns, prohibited contracts, market safeguards, and questions about regulatory authority.

Industry participants including Kalshi, Polymarket, and venture capital firm Andreessen Horowitz have urged the CFTC to retain sole oversight of prediction markets. State gaming officials from Pennsylvania and Tennessee have argued that sports event contracts resemble sports betting and should not fall under the regulator’s authority.

Tribal groups and gaming industry challenge sports contracts

Separate filings submitted Thursday focused on the impact prediction markets could have on tribal gaming operations and state gambling systems.

According to a brief filed by the Indian Gaming Association and affiliated tribal organizations, sports prediction markets interfere with tribal rights established under the Indian Gaming Regulatory Act because gaming activity on tribal lands is required to benefit tribal communities rather than private companies.

The filing accused Kalshi of operating what it described as unregulated gaming activity across state and tribal jurisdictions while diverting revenue away from governments and tribal entities.

Another brief from the American Gaming Association argued that sports prediction markets and traditional sportsbooks are functionally similar. The group cited a trademark application filed by Kalshi that referenced services related to sports betting and gambling activities.

Better Markets also urged the court to reject the classification of sports prediction markets as swaps, pointing to previous statements in which Kalshi distinguished sports markets from political event contracts.

Emphasizing what he described as Congress’ original intent, Gensler argued that lawmakers never expected federal derivatives laws to replace state sports betting frameworks. 

“Senate Majority Leader Harry Reid of Nevada would never have consented to or passively accepted legislation displacing an activity so critical to his state’s economy and politics by permitting sports betting only under CFTC auspices,” the filing said.

The outcome of the case could have significant implications for the industry. If courts ultimately side with the CFTC, prediction market operators may continue offering event contracts under a federal framework. 

If states prevail, platforms could face separate licensing and compliance requirements in every jurisdiction where they operate, with some states potentially pursuing civil or criminal penalties against unregistered operators.

With federal appeals courts issuing conflicting decisions and both regulators and states defending competing interpretations of the law, the dispute appears increasingly likely to reach the U.S. Supreme Court.

The US Securities and Exchange Commission proposal to rescind rules around order protections and price quotes could remove a major legal barrier for tokenized US stocks.

The SEC on Thursday proposed to scrap two rules in its national market system regulations. Rule 611 that bans “trade-throughs,” where a stock order on one exchange can’t be for a worse price than on another, and Rule 610(e) banning exchanges from displaying a bid at the same or higher price than what is available elsewhere.

Galaxy head of research Alex Thorn said the proposal is “one of the biggest unlocks yet for tokenized stocks” as it would remove “one of the biggest structural barriers to tokenized US equities trading in DeFi.”

The SEC has been looking to undo rules that restrict crypto and blockchain technology. It launched “Project Crypto” in August 2025 with the goal of making rules for the use of digital assets and blockchain in US markets.

Source: Alex Thorn

Thorn said that automated market makers (AMM) in crypto, or programs that facilitate trading by pooling assets, can’t comply with trade-through rules as they execute orders against “whatever the pool price is.”

He added that an AMM also can’t stop a trade if a better quote exists elsewhere, meaning any pool in a tokenized stock governed by the current rules “would commit trade-throughs constantly and arguably be an illegal trading center.”

Related: SEC makes digital assets strategic priority through 2030

Prices from AMMs also constantly fluctuate and would also be in constant violation of the rule aiming to guarantee investors get the best price across all platforms, Thorn said.

The SEC is likely to replace the rules with a “best execution” framework, which could permit AMMs under the rules, Thorn said.

The agency put its proposal up for feedback for 60 days, where it will then review responses and may change its proposal in response to comments.

It comes as the SEC was reportedly set to release a plan last month allowing tokenized stock trading, but postponed the plan after officials from stock exchanges raised concerns over how the plan would be executed.

Magazine: Can Robinhood or Kraken’s tokenized stocks ever be truly decentralized?

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.

Key Highlights

• The Securities and Exchange Commission has put forward a proposal to eliminate Rules 611 and 610(e) from Regulation NMS, regulations that have shaped equity trading in the United States since 2005
• Rule 611 prohibits executing trades at inferior prices compared to the best available market quote; Rule 610(e) restricts locked or crossed quotations
• Alex Thorn from Galaxy Digital characterized this development as “one of the biggest unlocks yet” for tokenized equity trading within decentralized finance
• The structural design of automated market makers makes legal compliance with these regulations impossible, effectively barring tokenized American stocks from decentralized trading venues
• Final implementation of the regulatory change is anticipated in Q1 2027, though temporary exemptions for tokenization pilot programs may arrive earlier

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The Securities and Exchange Commission has unveiled a proposal to dismantle two established stock market regulations that industry analysts argue have prevented tokenized American equities from operating on decentralized finance platforms.

These regulations — identified as 611 and 610(e) within Regulation NMS — were established in 2005. Rule 611 prevents trade execution at prices inferior to the optimal available quote across any trading venue. Rule 610(e) prohibits market venues from displaying quotations that lock or cross against quotes on competing platforms.

Chairman Paul Atkins of the SEC stated the proposal aims to “simplify market structure and reduce costs for market participants while allowing competition, innovation, and other market forces to shape the continuing evolution of our equity markets.”

The public commentary period of 60 days has commenced.

Implications for Decentralized Finance

Alex Thorn, serving as head of research at Galaxy Digital, outlined why these regulations represented an insurmountable obstacle for tokenized equity trading within cryptocurrency markets.

Automated market makers — the algorithmic systems driving decentralized exchanges — function by executing transactions against liquidity pools at current pool-determined prices. These systems lack the capability to query Nasdaq pricing. They cannot suspend a transaction due to superior pricing availability elsewhere. Under the framework of Rule 611, every transaction becomes a regulatory violation.

“Any pool in a tokenized NMS stock would commit trade-throughs constantly and arguably be an illegal trading center,” Thorn explained.

Rule 610(e) presented identical challenges. AMMs perpetually adjust pricing based on transaction flow, resulting in quotes that would regularly lock or cross the National Best Bid and Offer — activity that current regulations mandate exchanges prevent.

Future Developments

Should the regulations be eliminated, the SEC is anticipated to depend on a “best execution” framework under FINRA Rule 5310 instead. This approach is principles-oriented and applies at the broker level, making it compatible with AMM operational models.

Jaret Seiberg, who serves as managing director at TD Cowen’s Washington Research Group, indicated the proposal will likely receive approval. The rule is expected to reach finalization during Q1 2027.

However, Seiberg suggested that tokenization pilot projects may not face delays until that date. He anticipates the SEC will grant early-stage tokenization initiatives exemptive relief from Rule 611 prior to official repeal.

This regulatory proposal forms part of the SEC’s comprehensive “Project Crypto” initiative, introduced in August 2025, designed to establish more definitive regulations for digital assets and blockchain technology within American markets.

Thorn observed that additional obstacles persist, including exchange registration requirements, clearance and settlement protocols, and regulations not designed for decentralized trading environments. He indicated these matters may be resolved through an upcoming SEC “innovation exemption.”

The SEC had previously planned to unveil a tokenized stock trading framework last month but postponed the release following objections from stock exchanges regarding execution concerns.

Blockchain-based prediction markets have recently emerged as the go-to-place for investors to bet on the SpaceX IPO, offering a decentralized alternative to traditional pre-IPO markets. Unlike private equity deals that require accreditation and high minimums, these onchain markets are accessible to retail investors with minimal capital, creating 24/7 price discovery on IPO odds.

At Wednesday’s level near $157, SPCX implied only a roughly 16% premium to the $135 IPO price, down from about 60% when the contract briefly traded near $216 in May. At $183, the implied premium is back near 36%.

Other shadow markets are now pointing the same way. Bloomberg reported Friday that IG International derivatives implied a SpaceX valuation of about $2.4 trillion, more than 35% above the $1.77 trillion valuation set by the IPO price.

Elsewhere, Polymarket traders put 70% odds on SpaceX closing its first trading day above $2 trillion.

The reversal comes as pre-IPO SPCX has shown caution in the market, falling by about 30% over the past few weeks. It suggested traders still expected SpaceX to trade above the offer price, but not at the explosive premium implied by the bookbuild. And Friday’s bounce now says that discount is closing.