NYT Investigation Points to a Shift in CFTC Crypto and Prediction-Market Enforcement

A New York Times investigation says the Commodity Futures Trading Commission (CFTC) sidelined senior officials who raised concerns about large prediction-market and crypto-linked platforms, fueling questions about how the agency is handling oversight of the sector. What the NYT reported Career CFTC staff who flagged issues involving Polymarket, Crypto.com and a Gemini affiliate were suspended, put on administrative leave or otherwise forced out, according to the report. Two officials who questioned the activity were said to be on leave by late 2025, and three other employees linked to crypto enforcement faced similar measures. The officials had raised concerns around consumer protections, fraud controls and whether a Gemini affiliate had completed required regulatory review. The NYT reports that then-acting CFTC Chair Caroline Pham and senior counsel Brigitte Weyls later helped the firms move forward. Staff inside the agency reportedly took the message as: "Don't cause trouble." The White House denied conflicts of interest, with spokesman Davis Ingle telling the NYT: "There are no conflicts of interest." Enforcement pullback The NYT says the CFTC has pulled back from crypto enforcement under the current administration, dropping at least five crypto probes and bringing only two crypto enforcement cases, both targeting individual operators. Separately, Reuters reported the CFTC sued New York on April 24, arguing the state overstepped after New York sued Coinbase Financial Markets and Gemini Titan over prediction-market products. The CFTC has also challenged state actions in Arizona, Connecticut, Illinois, New York and Wisconsin. Regulatory changes and ongoing rulemaking The CFTC recently issued no-action relief for fully collateralized event contracts traded on regulated exchanges, easing certain swap-data reporting and recordkeeping requirements for designated contract markets, clearing firms and market participants. In March, the agency opened a broader rulemaking on prediction markets, requesting public comment on event contracts, public-interest limits, cost-benefit analysis and potential future rules. Industry positioning and talks with regulators Polymarket is in discussions with the CFTC over lifting a four-year U.S. ban tied to a 2022 enforcement action and a $1.4 million settlement. Talks focus on contract design, KYC and reporting requirements. In 2025, Polymarket acquired QCX LLC, a CFTC-registered exchange, for about $112 million. The deal could provide a path to a regulated U.S. offering if approved. Politics and the broader backdrop On the staffing front, the House Agriculture Committee recently urged President Trump to fill four vacant CFTC commissioner seats, warning that a single-member commission cannot keep up with expanding crypto and prediction-market responsibilities. On Capitol Hill, the Senate Banking Committee advanced the CLARITY Act by a 15-9 vote. The bill would split digital-asset oversight between the SEC and the CFTC, a change that could materially reshape U.S. crypto regulation. Why it matters The NYT account depicts mounting internal tension at the CFTC as prediction markets and crypto-linked products face increasing scrutiny, alongside growing state-federal clashes. The agency's ongoing rulemaking, headline litigation and congressional action will shape whether the CFTC ramps up enforcement, cedes ground to states, or moves toward clearer rules for crypto-based event markets in the U.S.