US CLARITY Act Hearing Flags CFTC Staffing Shortage and Prediction‑Market Oversight

A House Agriculture subcommittee hearing examined the Commodity Futures Trading Commission’s (CFTC) ability to supervise rapidly expanding sports‑event prediction markets such as Kalshi and Polymarket. Lawyers, including Carl Kennedy of Katten Muchin Rosenman, testified that the agency is "short‑staffed" and lacking resources to enforce rules for both crypto assets and prediction‑market contracts. The discussion focused on the pending Digital Asset Market Clarity (CLARITY) Act, which could broaden the CFTC’s jurisdiction to cover prediction markets and provide additional funding and authority.

The Senate version of the CLARITY Act, recently released by Republicans, also contains an ethics package that would ban federal officials—president, members of Congress, judges and their spouses—from issuing or holding crypto tokens, with a sunset clause set for 20 January 2029. It preserves protections for non‑custodial developers, requires segregation of customer assets in exchange bankruptcies, and maintains a stable‑coin framework. Industry observers, including XRP supporters, view the bill as a step toward regulatory certainty for digital assets.

State regulators continue to challenge the CFTC’s claim of exclusive jurisdiction, and several lawsuits against prediction‑market platforms remain pending. Lawmakers indicated further congressional action will be needed to resolve the federal‑state split and ensure adequate consumer protections.