SEC Chair Paul Atkins said the agency will seek public feedback before approving prediction market ETFs.
Crypto News
US Securities and Exchange Commission Chair Paul Atkins announced on May 20 that the regulator is pausing review of a recent group of newly filed ETF applications, including prediction market funds, to gather public feedback before deciding how to proceed. Atkins issued a statement directing SEC staff to seek comment on the implications of approving such products, citing the principle that "novel products raise novel questions."
The pause follows earlier delays applied to prediction market ETF applications from Bitwise, Roundhill Investments, and GraniteShares, each of which filed in February 2026. Bitwise filed for a series of funds under the PredictionShares brand tied to US election results. Roundhill and GraniteShares submitted comparable applications covering the same election cycles.
A prediction market ETF would give investors direct access to binary event contracts through a standard brokerage account, without requiring them to use crypto-native platforms. The concept mirrors the path taken by Bitcoin (BTC) and Ethereum (ETH), both of which entered regulated ETF structures after years of regulatory deliberation, drawing billions in institutional inflows.
Bloomberg ETF analyst Eric Balchunas said on X that the SEC is "clearly wrestling" with how to treat the new product category, drawing a parallel to how the agency navigated spot crypto ETF applications before approving Bitcoin funds in January 2024. He said regulators want to feel comfortable before they "open the barn door."
Prediction markets have expanded rapidly over the past 18 months, consistently recording more than $15 billion in monthly trading volume across categories including elections, sports, financial outcomes, and cultural events, according to Token Terminal data. The category has moved from a niche crypto use case to a mainstream financial product now pursued by institutional issuers.
Atkins acknowledged in his statement that ETFs have been a "major driver" of innovation in securities markets, with ETF assets tripling since 2019. The SEC has shown increased flexibility toward new product structures in recent years, including the introduction of a generic listing standard model in September 2025 that replaced case-by-case application reviews. The review delay also comes as prediction market platforms such as Kalshi continue to face legal challenges in multiple US state courts.
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