Warren prods CFTC chair over 3 reports of bias favoring crypto

Senator Elizabeth Warren demanded answers from the CFTC after reports of political interference benefiting crypto and prediction market firms.

Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee, pressed Commodity Futures Trading Commission Chairman Michael Selig on Friday over three reports of outside interference and favoritism benefiting the crypto and prediction markets industries.

"Taken together, these are concerning signs of a CFTC beholden to political pressures and interests of the wealthy insiders, unbound by the rule of law and failing to protect investors and market integrity," Warren wrote in a letter to Selig, who took office in December as the sole sitting commissioner of the five-member bipartisan agency.

The New York Times and other outlets reported that CFTC leadership intervened to benefit companies backed by Trump allies and punished agency staff who stood in the way. The agency's headcount has fallen to its lowest level since the 2008 financial crisis, and enforcement activity has dropped sharply. Crypto companies and prediction markets have benefited under the Trump administration's CFTC, which has dropped enforcement actions and is drafting friendly regulations aimed at sector growth.

The inquiry adds to mounting congressional scrutiny of the prediction market sector as concerns about insider trading grow. The CFTC did not immediately respond to a request for comment. The White House told the Times last month that President Trump faced no conflicts of interest.

A Pattern of Pressure

Warren's letter cited reporting that agency leadership intervened to benefit companies backed by Trump allies, including prediction market platforms such as Kalshi and Polymarket, which have expanded under the CFTC's lighter touch. Staff who raised objections were sidelined, according to the reports.

The CFTC's enforcement division has opened fewer cases against crypto firms since Selig took over, reversing a trend of aggressive action under the previous administration. The agency is also working on rulemaking that would formally expand the scope of permissible event contracts, a move that could benefit prediction market operators.

Broader Regulatory Push

The Massachusetts senator's scrutiny of the CFTC follows a parallel effort to restore funding to the Consumer Financial Protection Bureau, which Republicans slashed in half last year to $446 million. Warren and 10 other Senate Democrats introduced legislation Thursday that would mandate a 12 percent funding floor for the CFPB, immunizing it from future partisan attacks.

While the CFPB bill has little chance of passing the current Senate, it shows the regulatory agenda Democrats plan to pursue if they regain control of Congress in the midterm elections.

This article is for informational purposes only and does not constitute investment advice.