Wall Street's two major regulatory agencies join forces to enter the market, will the "wild era" of cryptocurrency and prediction markets soon come to an end?

Notice that the main regulatory agencies on Wall Street are moving forward with plans to regulate the cryptocurrency industry and the booming prediction market, which could have far-reaching implications for the broader financial markets. After months of public statements by regulatory agencies and political maneuvering in Congress, the Securities and Exchange Commission (SEC), which regulates the US stock market, and the Commodity Futures Trading Commission (CFTC), which regulates derivatives trading, have submitted plans to the White House. Although details are still unclear, this bureaucratic step is one of the most significant moves by the Trump administration's market regulatory agencies to date. Since Trump took office last year, US financial regulatory agencies have significantly reversed their approach - being far more friendly towards regulating digital assets and so-called "event contracts" compared to the Biden era. The plans implemented under Trump's leadership could ultimately provide a formal roadmap for these industries and institutionalize the moderate regulatory approach currently being taken by officials. Both industries have recently moved closer to the mainstream financial sector, with the prediction market booming into a business worth billions of dollars and digital asset companies receiving support from the president who hopes to make the US the global "cryptocurrency capital." Now, in a favorable political environment, these industries are poised to receive the clear guidelines they have long pushed for, and regulatory agencies have taken a crucial step this week. The White House Office of Information and Regulatory Affairs (OIRA) received a key cryptocurrency regulation measure from the SEC on Tuesday in the form of committee-level guidance. According to the announcement on the OIRA website, the matter involves "the applicability of federal securities laws to certain types of crypto assets and transactions involving crypto assets." When asked about the project, an SEC spokesperson mentioned previous statements by Chairman Paul Atkins, stating that the regulatory agency would consider developing interpretive guidance around token taxonomy for crypto assets - to comply with market structure legislation - ensuring that investors and innovators understand their regulatory obligations clearly. In theory, token taxonomy could establish formal categories for different types of crypto assets - for example, determining whether a specific token is considered a security regulated by the SEC or falls under the jurisdiction of the CFTC. This distinction could have significant consequences for the registration, disclosure, and operation of cryptocurrency companies. Committee-level guidance does require a committee vote and is considered more binding than staff-level statements. However, they have not yet reached the full legislative process involving public notice and comment. Atkins has made it clear that digital asset legislation is a cornerstone of his policy agenda. Although he has repeatedly stated that legislation through Congress on crypto market structure would be better, he has also commented that the agency has significant power to advance rules on digital assets if necessary. A bill aimed at providing a regulatory framework for digital assets was stalled in the Senate earlier this year, with part of the deadlock stemming from a struggle between the banking industry and cryptocurrency companies, focusing on whether companies like Coinbase have the right to offer rewards to customers holding stablecoins on their platforms. In recent weeks, representatives from the banking and cryptocurrency industries have met multiple times at the White House in an attempt to reach a compromise. Prediction Markets In addition to prioritizing cryptocurrency, the regulatory agencies of the Trump era have also embraced prediction markets, which allow customers to bet on the outcomes of various events ranging from presidential elections to college basketball. Another announcement on the OIRA website shows that the White House is reviewing a measure from the CFTC regarding prediction markets after receiving the project on Monday. Typically, once the OIRA review is complete and the CFTC formally publishes the measure, the public will be able to participate in a comment period. CFTC Chairman Michael Seeley had previously announced that the agency would develop new rules for the industry. He stated on Tuesday at an event hosted by the Milken Institute that the measure had evolved into an "Advance Notice of Proposed Rulemaking" (ANPRM), similar to a preliminary concept draft published by agencies before formally initiating the legislative process. In the past year, trading volume in the prediction market industry has soared, primarily driven by sporting events, although contracts related to the recent Iran conflict and broader Middle East tensions have attracted severe scrutiny from various parties in Washington in recent days. Previously, independent agencies like the SEC and CFTC were not required to submit new rules for White House review, but the Trump administration announced in 2025 that all executive branch agencies (including US financial regulatory agencies) should do so.