Regulation
CFTC forms an Innovation Task Force to write the rulebook for AI, crypto and prediction markets
Led by chairman Selig's senior adviser Michael Passalacqua, the task force will coordinate with the SEC's own crypto initiative to give AI and blockchain builders a direct channel to regulators, but Selig has been explicit that engagement is not a substitute for compliance with existing law.
The CFTC has stood up an Innovation Task Force, working alongside a newly formed Innovation Advisory Committee, with a mandate covering three areas: crypto assets and blockchain infrastructure, artificial intelligence and autonomous systems, and prediction markets and event contracts. It is led by Michael J. Passalacqua, a senior adviser to chairman Selig, and staffed with a mix of career CFTC personnel and people pulled in from the private sector who have direct experience building the technologies the task force is meant to govern. The Commission says it will coordinate with the SEC's parallel crypto task force rather than duplicate it, an explicit attempt to avoid the two agencies producing conflicting guidance on the same products.
The timing tracks a real gap. Autonomous trading agents, tokenised securities and prediction-market contracts have all been scaling faster than the regulatory text written to cover them, and firms building in this space have had to guess at how existing derivatives law applies to systems that were not contemplated when that law was drafted. A structured channel where builders can walk regulators through what a product actually does, before it launches rather than after an enforcement action, is a meaningfully different posture from the CFTC's historical approach to novel financial technology.
Selig has drawn the line carefully: engagement with the task force gives industry a voice in shaping upcoming rules, but it does not create safe harbour from existing law, and firms operating AI-driven trading or tokenisation products today are still bound by the framework as it stands. The overlap with the SEC's own crypto task force is also not fully resolved. Both agencies claim coordination as the goal, but jurisdictional boundaries between commodities and securities regulation have been contested territory for crypto assets for years, and adding AI and autonomous systems to that boundary does not obviously simplify it.
For anyone operating AI trading infrastructure that touches CFTC-regulated products, futures, swaps, or the compute and prediction-market derivatives increasingly being built alongside them, this is a signal that a formal rulebook is coming, not evidence that one exists yet. The sensible read is to treat the task force as an early-warning channel: a place to understand where the Commission's thinking is heading, not a mechanism that changes what is currently permitted. Firms that engage early get visibility into the direction of travel; firms that wait will simply receive the finished rules with less say in how they were written.
Read the original: PYMNTS - CFTC forms an Innovation Task Force to write the rulebook for AI, crypto and prediction markets. Commentary is the independent editorial view of Share Trading; the original article is credited to its publisher.