CFTC Chair Mike Selig faced sharp bipartisan scrutiny Thursday as House lawmakers pressed him on how the regulator is handling fast-evolving crypto-linked products—from prediction markets that let users bet on political events to Hyperliquid, a offshore decentralized exchange for perpetual futures.
The hearing, before the House Agriculture Committee (which oversees the CFTC), threaded two central concerns: potentially suspicious, high-dollar futures trades tied to political announcements, and the growth of complex derivatives trading on crypto-native platforms that operate outside traditional U.S. oversight.
Democrats led much of the questioning about a pattern of large futures wagers placed just before major White House statements that produced windfall gains. Lawmakers cited one March 23 episode in which roughly $500 million was reportedly bet on oil prices about 15 minutes before President Donald Trump posted on social media about renewed negotiations with Iran—after which oil prices dropped. Democrats pressed Selig on whether the trades might reflect insider knowledge and whether people close to the president could have benefited. Selig said the agency is intent on rooting out insider trading but bristled when lawmakers named the president’s family. (Donald Trump Jr. is an advisor to prediction-market platforms Polymarket and Kalshi.)
“I’m not going to play speculation games with you,” Selig told Rep. Jim McGovern (D-MA) when asked if Trump family members could have had advance knowledge of the president’s post. Democrats also objected to prediction markets that let users wager on war or the deaths of public figures. “I don’t believe this is market innovation,” Rep. Jim Costa (D-CA) said, calling such markets “profiting from tragedy.” Selig responded that the CFTC’s statutory definitions of “commodity” and “swap” are broad and that he is preparing a proposed rulemaking on prediction markets that will be open to public comment—while also defending the agency’s legal authority to regulate them.
Another notable exchange highlighted Selig’s insistence that certain event contracts—often positioned by platforms as distinct from gambling—fall within the CFTC’s jurisdiction. In questioning, Selig appeared unable to distinguish an unlabeled sports wager from an unlabeled event contract tied to the same baseball game, prompting Rep. Gabe Vasquez (D-NM) to say, “It’s clear to me you can’t tell [the difference], because the average consumer also can’t tell.” Several states have sued platforms arguing those contracts amount to illegal gambling.
Republicans raised separate national-security and market-stability alarms, zeroing in on Hyperliquid, a popular crypto-native perpetual futures exchange. Perpetuals are derivatives with no set expiry, allowing indefinite exposure to price moves. Hyperliquid operates offshore and is thus technically outside the CFTC’s direct jurisdiction, but Rep. Austin Scott (R-GA) warned that the platform’s heavy volume in key markets such as oil could still affect U.S. markets and consumers. “If the volume that I’m seeing is correct, it has the potential to be detrimental to the United States consumer,” Scott said, urging the CFTC to find ways to ensure offshore platforms meet comparable transparency and risk standards to regulated U.S. futures exchanges.
Selig has recently signaled interest in broadening retail access to perpetual futures—an expansion that many lawmakers flagged as risky given the product’s leverage and potential for spillover into the broader economy.
Bottom line: the hearing underscored mounting congressional concern across party lines about new crypto-era trading venues and exotic contracts. Lawmakers pushed the CFTC chair for clearer rules and stronger enforcement tools as decentralized exchanges and prediction markets increasingly intersect with mainstream political and economic events. The chair said rulemaking is coming, but several members left unconvinced that current oversight is sufficient.
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