White House Receives SEC-CFTC Plan to Federally Regulate Prediction Markets

The SEC and CFTC have proposed a plan to the White House to establish clear regulations for prediction markets in the cryptocurrency sector, marking a shift towards clarity.

The landscape of crypto regulation in the United States is undergoing a significant transformation as the SEC and CFTC jointly propose reforms to the White House aimed at clearly defining rules for the cryptocurrency market. This coordinated effort marks a notable shift from years of regulatory ambiguity and enforcement-focused actions. What Are the Major Proposals on the Table? On March 5, 2026, the SEC submitted an important interpretive guidance titled “Commission Interpretation on Application of the Federal Securities Laws to Certain Types of Crypto Assets.” This guidance seeks to clarify how federal securities laws apply to various cryptocurrencies, moving beyond the SEC's previous enforcement-centric approach. This proposed framework is currently under review by the Office of Information and Regulatory Affairs (OIRA) and aims to establish a formal taxonomy for identifying which crypto assets qualify as securities. By classifying these assets, the SEC hopes to provide market participants with greater legal certainty and a clearer path to compliance. What is the SEC's New Token Taxonomy? The SEC's forthcoming framework will categorize cryptocurrencies based on their functionalities and investment contracts. This formal taxonomy is expected to distinguish between security tokens, utility tokens, and potentially other categories, enhancing the regulatory clarity that the industry sorely needs. Resistance from stakeholders is anticipated, especially since the initial efforts under the CLARITY Act, which sought to create a comprehensive market structure for cryptocurrencies, faced delays in Congress—partly due to conflicts between banking institutions and crypto firms regarding stablecoin rewards. “Providing clear guidance that does not stifle the development of novel blockchain applications is crucial,” stated Commissioner Hester Peirce, who has been a strong advocate for regulatory clarity. How Will This Impact Crypto Firms? The implementation of this guidance is