CFTC Sets Separate Paths for Crypto Trading and Sports Contracts

The Commodity Futures Trading Commission is pursuing separate classifications for retail crypto transactions and sports-event contracts, drawing new boundaries around products that may fall under federal derivatives oversight.

On Oct. 5, the CFTC sought public comment on retail crypto transactions, or “CTXs,” and a proposed designated-contract-market subcategory called a “crypto asset market,” or CAM. The advance notice is not a final rule, and comments would be due 60 days after publication in the Federal Register.

CFTC Chairman Michael S. Selig said the agency wants to incorporate crypto transactions into a “uniform national market regulatory framework.” The proposal would apply existing authority over certain retail commodity transactions involving margin, leverage or financing.

Under the CFTC framework, a qualifying retail transaction generally falls within the actual-delivery exception if the customer receives control of the crypto asset in an independently controlled wallet no later than 28 days after the transaction. The approach follows an earlier CFTC effort to build a crypto-market framework under existing powers.

On Oct. 9, the CFTC proposed defining contracts tied to sports, political, cultural and weather events as swaps. Comments would be due within 30 days of Federal Register publication.

“These products are commodity derivatives squarely within the CFTC’s regulatory remit under the Commodity Exchange Act and are within the agency’s exclusive jurisdiction,” Selig said.

The CFTC also issued an interim final rule excluding casino-style gambling products, including sportsbook wagers and casino games, from the swap definition. The rule is intended to take effect when published in the Federal Register and includes a 30-day comment period.

“Casino-style gambling products are not derivatives,” Selig said.

The distinction is disputed in litigation involving prediction-market platform Kalshi. New Jersey argues that sports contracts are gambling products subject to state regulation, while the CFTC considers qualifying event contracts subject to its federal jurisdiction.

New Jersey argues that the Third and Ninth circuits disagree over whether sports contracts are swaps and whether federal law preempts state gambling laws. Kalshi began offering sports-related contracts about five years after the CFTC authorized its designated contract market in 2020, and the agency had not determined that those contracts were contrary to the public interest.

“These sports bets are not ‘swaps’ as the statutory text and structure uses that term,” New Jersey argues.

The CFTC’s actions come as Sen. Elizabeth Warren seeks a review of staffing cuts and their effect on enforcement and derivatives oversight. CFTC staffing had declined 25% since January 2025.

The crypto framework, event-contract proposal and sports-betting exclusion remain subject to public comments, Federal Register publication and ongoing litigation.