The Commodity Futures Trading Commission (CFTC) has announced a new initiative to help guide oversight of new and emerging financial technology, including operations in the prediction markets space.
Chairman Michael S. Selig announced today the formation of the Innovation Task Force. The initiative comes as a larger federal response to changing times in the derivatives markets.
The task force, which comes on the heels of the Innovation Advisory Committee’s formation in January, is tasked with developing a more defined regulatory landscape for companies working to build new financial products.
Those products include crypto assets, blockchain technology, artificial intelligence, and prediction markets.
The task force is expected to function alongside the advisory committee in a collaborative effort to provide regulatory clarity while still enabling companies to continue innovating in the US.
The move, as explained by Selig, is meant to ensure that local companies remain competitive in the wake of more advanced financial innovations in the world.
Leadership of the task force has been assigned to Michael J. Passalacqua, who joined the commission in January as a senior advisor.
His appointment places him at the center of the agency’s evolving technology agenda. Passalacqua is expected to guide coordination between internal teams and external stakeholders.
The task force will also work with other federal agencies, including the Securities and Exchange Commission.
Work with the SEC to continue with task force
Collaboration with the SEC’s crypto-focused initiatives is expected to play a role in aligning regulatory standards. This interagency coordination is designed to avoid fragmented oversight across related markets.
Passalacqua brings both government and private sector experience to his position. Before joining the commission, he was an associate at Simpson Thacher & Bartlett, where he worked on digital asset litigation and regulatory issues.
His previous work included his involvement in enforcement actions related to blockchain technology. He was also a contributor to a 2025 regulatory request, which led to a no-action letter from the SEC.
The outcome of this case was a decision that allowed trust companies to act as qualified custodians of crypto assets.
Passalacqua was previously an in-house lawyer with a digital asset capital markets firm. That position provided exposure to trading infrastructure and operational challenges in emerging financial systems.
His background is seen as relevant to bridging traditional derivatives regulation with newer technologies.
The Innovation Task Force is expected to make suggestions that take into account both risk management and market integrity. This comes as regulators are faced with a conundrum in balancing rapid technological growth with existing laws.
The commission has yet to outline a specific timeline for delivering formal recommendations.