The Commodity Futures Trading Commission (CFTC) has launched a dedicated Innovation Task Force to build clearer regulatory frameworks for crypto assets, artificial intelligence, and prediction markets.
The announcement signals a broader shift in how U.S. financial regulators intend to engage with emerging technology moving from reactive enforcement toward proactive policy development.
CFTC Chairman Michael S. Selig unveiled the task force on Tuesday at the Digital Asset Summit in New York City.
“The idea behind our innovation task force is to really create a space where innovators and builders can come in and talk with the staff,” he told attendees.
“It’s not just crypto, it’s going to be prediction markets, crypto, and AI. We think these three verticals are really important.”
Who Is Leading It
The task force will be led by Michael J. Passalacqua, a senior adviser to Chairman Selig.
Passalacqua joined the CFTC in January after working on crypto and blockchain issues at international law firm Simpson Thacher & Bartlett.
His background includes prior work as an in-house lawyer at a digital asset capital markets firm, giving him direct exposure to the operational challenges facing crypto businesses.
Three Areas of Focus
The task force covers three distinct verticals under one coordinated body:
- Crypto assets and blockchain technologies — developing clearer compliance frameworks for digital asset derivatives
- Artificial intelligence and autonomous systems — addressing AI-driven trading and automated market participants
- Prediction markets and event contracts — clarifying the boundary between regulated contracts and other activities
The CFTC has already been moving aggressively on prediction markets.
It issued a prediction markets advisory in February and advanced rulemaking in March, as the sector draws scrutiny over insider trading and sports-related contracts.
Coordination With the SEC
A central feature of the task force is its mandate to coordinate with other federal agencies most notably the Securities and Exchange Commission (SEC) and its own Crypto Task Force.
The two agencies have been moving closer together on digital asset oversight.
They issued a joint statement in September 2025 on spot crypto asset trading, and held a joint event in January to highlight their shared regulatory priorities.
Selig himself previously served as chief counsel to the SEC’s Crypto Task Force before being sworn in as the CFTC’s 16th chairman on December 22, 2025.
That background has shaped his push for tighter interagency alignment.
The task force will also work alongside the CFTC’s Innovation Advisory Committee, which was established in January and includes more than 30 executives from across the industry among them Kalshi CEO Tarek Mansour and Nasdaq CEO Adena Friedman.
What It Means for the Market
The launch does not itself create new rules.
Rather, it formalises the CFTC’s internal agenda around product categories where technology and market activity are moving faster than existing frameworks.
For crypto firms, DeFi protocols, AI-driven trading systems, and prediction market operators, the task force creates a formal point of contact for seeking regulatory guidance before launching products.
The CFTC previously ran LabCFTC, a fintech outreach initiative launched in 2017 but the new body goes further.
Concrete mechanisms such as no-action letters, regulatory sandboxes, and structured public comment processes are all on the table.
For institutional investors, clearer rules have long been cited as the key barrier to broader crypto market participation.
Greater regulatory certainty is widely expected to support increased institutional involvement.
The Bigger Picture
The move reflects a competitive as much as a regulatory goal. Selig framed the initiative as a way to keep innovation inside the U.S. regulatory perimeter.
“By establishing a clear regulatory framework for innovators building on the new frontier of finance, we can foster responsible innovation at home and ensure American market participants are not left on the sidelines,” he said in a statement.
The task force arrives amid ongoing Congressional efforts on digital asset legislation.
The CLARITY Act, a market structure bill, passed the House in July 2025 but has stalled in the Senate over unresolved disputes around stablecoin yield, tokenized equities, and other issues.
Whether the task force ultimately produces formal rulemaking or remains advisory will determine its real-world impact.
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