Finance08 October, 20263 min read
NPR Says CFTC Staffing Cuts Shrink Enforcement As Crypto And Prediction Markets Expand
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CFTC staff declined about 21% by end-2025, hampering enforcement of crypto and prediction markets. Crypto and prediction markets trade in hundreds of billions weekly, stretching regulator capacity.
CFTC staffing and enforcement
The Commodity Futures Trading Commission has faced staffing cuts that NPR links to reduced enforcement as crypto and prediction markets expanded, with the report citing that by the end of 2025 the CFTC had 21% fewer staff on its payroll than the previous 10-year average. Between January 2024 and January 2025 alone, staffing dropped 22%, and the agency made nearly 80% fewer enforcement actions in 2025 compared to the annual average for the previous decade. Jeff Le Rich, who worked as a CFTC enforcement lawyer between 2005 and 2025, said, "It castrated the enforcement team," and he added, "Many of the people that were targeted were high-performing attorneys."
Joe Konizeski, who worked as a CFTC enforcement lawyer for 26 years, said the acting chair Caroline Pham told staff, "We're closing all our crypto [cases]," and he described how matters "marginally related to crypto ended up getting closed." Zach Fulton, the CFTC spokesman, said in a statement to NPR that "The CFTC remains committed to promoting integrity and responsible innovation in U.S. derivatives markets."
States vs federal authority
The U.S. Court of Appeals for the Sixth Circuit ruled on September 25 that Kalshi’s sports-related event contracts are not “swaps” under the Commodity Exchange Act and held that even if they were swaps, the CEA does not preempt state regulation of the sports-event contracts.
The Sixth Circuit’s decision resolves litigation brought in 2025 against Kalshi by the Ohio Casino Control Commission and the Tennessee Sports Wagering Council, and an appeal before the Fourth Circuit remains pending.
The Sixth Circuit’s ruling deepens a circuit split, and Freshfields described how the Third Circuit held that the CFTC had exclusive jurisdiction over swaps, while the Ninth Circuit affirmed that the CEA does not preempt state gaming regulation of sports-event contracts.
The Sixth Circuit’s view that "state law and the CEA can coexist" when applied to sports-related events contracts.
The Sixth Circuit concluded that states may regulate Kalshi’s sports-related event contracts because "two savings clauses in CEA § 2(a)(1)(A) expressly preserve federal and state court jurisdiction."
NFL urges Supreme Court
The NFL told the Supreme Court that prediction markets regulation should be handled by the states, and it urged justices to rule on whether states should maintain control over sports betting. The NFL argued in an amicus brief supporting New Jersey regulators in their battle against Kalshi that sports prediction contracts are effectively gambling, not financial swaps regulated exclusively by the federal government. The NFL told CNBC that "on the first Sunday of the season, football accounted for $1.8 billion in prediction markets trading, more than half the total volume."
The NFL is concerned about contracts vulnerable to manipulation, including field goals where a kicker could intentionally miss or a wide receiver intentionally fumbling a pass. The NFL also told CNBC that "given the current resource constraints of the CFTC, this is a job better left to the states," and it added that neither the CFTC nor the prediction market companies themselves have banned categories of bets susceptible to manipulation or set a 21 age limit.