CFTC Chairman calls for regulatory support of innovation in $1.2 quadrillion derivatives market

CFTC Chairman Michael Selig has called for regulatory flexibility to support innovation in the $1.2 quadrillion global derivatives market. Selig advocates for "permissionless innovation" over restrictive international frameworks while maintaining safeguards against fraud. This policy is being tested by Binance.US's planned August 2026 application for a designated contract market license and a July 31, 2026 enforcement settlement with former U.S. Representative George Santos.

CFTC innovation policy shift

• ▪Under "Project Crypto," the Commodity Futures Trading Commission is collaborating with the Securities and Exchange Commission to coordinate regulatory treatment for products crossing traditional boundaries.
• ▪Commodity Futures Trading Commission Chairman Michael Selig stated that the agency will maintain its core focus on investor protection, anti-fraud rules, and market integrity while supporting innovation.
• ▪Commodity Futures Trading Commission Chairman Michael Selig, who took office in December 2025, has advocated for "permissionless innovation" and principles-based oversight.
• ▪Commodity Futures Trading Commission Chairman Michael Selig argued in The Economist on August 6, 2026, that regulators must allow financial innovation to lead rather than adopting restrictive international frameworks.

Global derivatives market scale

• ▪The global derivatives market has a combined notional value exceeding $1.2 quadrillion, according to Commodity Futures Trading Commission Chairman Michael Selig.
• ▪The Commodity Futures Trading Commission directly supervises markets representing nearly half of the global $1.2 quadrillion derivatives market.

Prediction market regulation

• ▪Prediction markets and cryptocurrency derivatives are serving as key testing grounds for the Commodity Futures Trading Commission's balanced regulatory approach.
• ▪Designated contract markets under Commodity Futures Trading Commission supervision must comply with federal requirements covering system safeguards, recordkeeping, conflicts of interest, and market monitoring.

Binance.US licensing application

• ▪Binance.US Chief Executive Stephen Gregory announced at the Rare Evo conference that the exchange plans to apply for a designated contract market license in August 2026.
• ▪A successful designated contract market license application would allow Binance.US to offer federally regulated event contracts, futures, and options to retail customers.

George Santos Kalshi settlement

• ▪Former U.S. Representative George Santos settled a Commodity Futures Trading Commission case on July 31, 2026, regarding the alleged manipulation of Kalshi prediction contracts.
• ▪Under the July 31, 2026 settlement, George Santos agreed to return $17,569.98 in profits, pay a $17,500 penalty, and accept a three-year trading ban on registered markets.

1 source