CoinDesk
Washington's crypto regulatory calendar is filling fast. The House Ways and Means Committee held a hearing last week on digital asset tax legislation, the CFTC published a formal proposal to regulate prediction markets, and a federal appeals court rejected Sam Bankman-Fried's bid to overturn his 2023 fraud and conspiracy conviction.
Why it matters
Crypto taxes are shaping up as the next major legislative battleground after the market structure bill — whenever that clears. The Ways and Means hearing was notably civil, with lawmakers focused on substantive questions about how crypto tax policy should work and where current rules fall short. That tone suggests bipartisan progress is possible, but also that significant drafting work remains before any bill reaches a markup or the House floor.
The CFTC's prediction market proposal adds another layer. The agency is trying to define what constitutes "gaming" for regulatory purposes — determining which prediction market contracts qualify as federally regulated swaps and which do not. Former SEC and CFTC Chair Gary Gensler filed an amicus brief arguing the term "swaps" was never intended to cover sports-betting-style contracts, while the CFTC simultaneously sued New Mexico, asserting the opposite position.
Market impact
The SBF appeal rejection closes one chapter but adds no new legal risk to the broader industry. The more consequential near-term watch is the SEC's innovation exemption proposal, which has already been delayed and is drawing concern from legal experts over its current structure.
Frequently asked questions
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What is the CFTC's prediction market proposal actually trying to decide?
The proposal seeks to define what counts as "gaming" for regulatory purposes, determining which prediction market contracts qualify as federally regulated swaps and which fall outside the CFTC's jurisdiction — a question the agency is simultaneously litigating in court against New Mexico.
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Why did Gary Gensler file an amicus brief that contradicts the CFTC's own legal position?
Gensler, as a private party and former chair, argued that the statutory term "swaps" was never intended to cover sports-betting-style contracts — a view directly at odds with the CFTC's active lawsuit against New Mexico asserting that sports-related prediction markets are swaps subject to federal oversight.
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What happens next for crypto tax legislation after the Ways and Means hearing?
The hearing was a fact-finding stage; lawmakers still need to resolve substantive drafting gaps before any bill can advance to a markup and then to the House floor, and bipartisan agreement on key sticking points has not yet been reached.
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