Prediction market company Kalshi has filed a lawsuit against the state of Illinois after Illinois Governor JB Pritzker signed SB 3019, the budget bill, into law last week.

 

The lawsuit, which was filed in the U.S. District Court for the Northern District of Illinois, lists key state officials as defendants, including Governor JB Pritzker, Illinois Attorney General Kwame Raoul, and other members of the Illinois Gaming Board, including Dionne R. Hayden.

 

By filing the lawsuit, Kalshi aims to block Illinois from enforcing the new tax law. Under the new law, cryptocurrency transactions in the state will be subject to taxation. The law also establishes a “Sports Wagering Fund” that would impose a 15% tax on gross receipts from sports-related prediction markets operating in the state. However, Kalshi argues that the law is preempted by the Commodity Exchange Act, asserting that its sports-event contracts are regulated by the Commodity Futures Trading Commission (CFTC).

 

“This action challenges the State of Illinois’s clear violation of the Supremacy Clause with respect to the regulation of event contracts,” Kalshi said in its complaint.

 

“The federal Commodity Exchange Act (CEA) grants the Commodity Futures Trading Commission (CFTC) exclusive jurisdiction over event contracts when they are traded or executed on a contract market that has been federally designated for that purpose.”

 

With the lawsuit filed, Illinois joins the growing list of states facing legal action from Kalshi. Late last month, Kalshi filed a lawsuit against Minnesota after the state banned prediction markets, becoming the first U.S. state to do so. Kalshi has also filed preemptive lawsuits against Rhode Island, Arizona, and Iowa.

 

CFTC’s Stance on Sports Event Contract Regulation

Despite strict regulatory control over prediction market activities by various state regulators, the U.S. Commodity Futures Trading Commission has maintained its position as the only agency with exclusive federal jurisdiction over event contracts traded on prediction market platforms.

 

Amid regulatory actions taken by state regulators, the CFTC this month released a framework that provided greater clarity on the regulation of event contracts while protecting prediction markets from state-level interference. To assert its authority, the CFTC has also sued state regulators in Arizona, Connecticut, New York, Minnesota, and New Mexico for their harsh regulatory stance on prediction market activities. 

 

 

Crypto's political machine keeps getting bigger, and now it's getting more specialized. A brand-new political action committee called Defend Developers PAC launched Wednesday with a pretty specific mandate: back the lawmakers who are willing to fight for legal protections for the people actually writing blockchain code.

 

The group describes itself as the first hybrid PAC focused exclusively on American crypto developers, DeFi builders, and blockchain technologists. It was federally registered just last month, and its founders say they plan to put six figures or more into dozens of congressional races before November.

 

Who's Behind It

The PAC was founded by Gavin Zavatone, who also serves as policy lead at the DeFi Education Fund, a trade group that lobbies for DeFi-friendly regulation in Washington. The board pulls together names from across the industry: Uniswap Labs, the Solana Policy Institute, the American Innovation Project, and Orca Creative all have representation.

 

"We plan to raise and contribute more than six figures across dozens of key races in the midterms, because crypto technologists deserve champions in Congress who will go to bat for them," Zavatone said in a statement. No specific dollar amounts have been disclosed yet regarding the PAC's initial funding, but the stated plan is to draw contributions primarily from crypto founders, CEOs, and builders who have a direct stake in how DeFi regulation shakes out.

 

A Different Kind of Strategy

What sets Defend Developers apart is who it plans to back. Rather than looking for new candidates to anoint or taking shots at incumbents it dislikes, the group says it will focus its money on lawmakers who are already in Congress and already working on these issues. The theory is that incumbent support carries more weight in shaping actual legislation, especially when that legislation, namely the Clarity Act, is still actively being negotiated.

 

Developer protections have emerged as one of the trickier sticking points in the Clarity Act talks. The bill, which cleared the Senate Banking Committee earlier this year with bipartisan support, still needs to navigate several unresolved issues before it can reach a floor vote. Defend Developers PAC is betting that funneling money toward lawmakers who are already shaping those negotiations is smarter than trying to build from scratch.

 

A Crowded Field With One Clear Leader

Let's be clear about where Defend Developers sits in the broader crypto PAC landscape: it's not challenging Fairshake anytime soon. The industry's dominant super PAC, backed by Coinbase, Andreessen Horowitz, and Ripple, entered 2026 with north of $191 million in its war chest and has been racking up wins all cycle.

 

Just this week, Fairshake went 11-for-11 in Tuesday's primaries, backing nine Democratic House candidates in California, one in New Jersey, and Republican Senator Mike Rounds in South Dakota. All of them won. That follows a dominant performance in Texas last week, where crypto-aligned PACs spent more than $9 million across both parties and delivered a notable defeat to Rep. Al Green, a longtime critic of the industry, who lost his seat to Christian Menefee. Fairshake has spent $6.5 million on that race alone.

 

The new PAC also doesn't yet rival mid-tier players like the Fellowship PAC, which is tied to Tether, or the Digital Freedom Fund, connected to Tyler and Cameron Winklevoss at Gemini. But it's also not trying to. Defend Developers is playing a narrower game, and that might actually be the point.

 

What To Expect Heading Into November

The launch of another crypto PAC is one more sign of just how much the industry has matured as a political force. Lobbying groups have reportedly spent well over $271 million swaying electoral outcomes since the start of 2026 alone, largely through advertising. The latest addition to that landscape signals that crypto's political operation is growing more specialized, not just bigger.

 

The Blockchain Association also organized a Washington fly-in this week, bringing former national security and law enforcement officials to Capitol Hill for briefings with staff from roughly 18 Senate offices. A virtual town hall with lawmakers was also scheduled for Thursday. The coordination across lobbying groups, PACs, and trade organizations is about as sophisticated as it's ever been.

 

With prediction markets roughly split on which party controls Congress after November, the crypto industry's bipartisan strategy is starting to look less like a compromise and more like a deliberate hedge. The general election stakes are high, and groups like Defend Developers are clearly trying to make sure that regardless of who wins, there will be friendly faces in the room when the serious DeFi legislation gets written.

 

For years, perpetual futures have been crypto's most traded instrument and almost none of that volume has touched U.S.-regulated infrastructure. Until now. The Commodity Futures Trading Commission (CFTC) formally approved KalshiEX to list BTCPERP, a no-expiry Bitcoin perpetual futures contract tied to spot BTC prices. On the same day, the agency's Market Participants Division issued a staff-level interpretation clearing Coinbase Financial Markets to route U.S. customers to certain derivatives on Deribit, its offshore affiliate. Two very different regulatory moves, made on the same morning, pointed at the same underlying problem: American traders have been effectively locked out of the largest segment of global crypto markets.

 

CFTC Chairman Mike Selig framed the Kalshi order as delivery on a specific commitment to onshore crypto perpetuals, describing the move as a path for one of the most liquid segments of the crypto asset markets to exist inside the U.S. regulatory framework. Coinbase CEO Brian Armstrong put a number to the problem his company says it is solving: until now, U.S. users have been locked out of roughly 80% of global crypto markets, which includes perpetual futures and options. Coinbase cited Deribit's more than $185 billion in July 2025 trading volume and approximately $60 billion in open interest at the time of acquisition to illustrate the scale of what domestic traders could not legally access through regulated channels.

 

What the CFTC Actually Approved

BTCPERP is a cash-settled contract referencing the U.S. dollar spot price of one Bitcoin, as tracked by the CF Benchmarks Bitcoin Real Time Index. It trades in units of one ten-thousandth of a BTC, runs 24 hours a day, seven days a week, and has no fixed expiry date.  Traditional futures converge toward their underlying asset at expiration because physical delivery or final cash settlement pulls the contract to spot. A perpetual has no such date, so the convergence mechanism operates continuously through periodic funding payments between long and short holders. If the contract trades above spot, longs pay shorts. If it trades below, shorts pay longs. The economic pressure keeps the perpetual price tracking Bitcoin in real time.

 

The CFTC's approval leans heavily on Bitcoin's specific market structure as its justification. The order notes Bitcoin's deep, active, and continuous spot trading across broadly distributed venues, with pricing observable around the clock. That depth is what makes the funding rate mechanism credible: arbitrageurs can act while the perpetual is live, since the underlying spot market never closes. The agency was explicit that this reasoning applies to Bitcoin and to similarly structured digital commodities with comparable market depth. Other assets will need to go through a separate review. Bitnomial had previously received certification for a product labeled a perpetual futures contract, but that contract carried a 25-year term limit and is considered a different structure. BTCPERP is the first true no-expiry perpetual to receive a Commission-level order.

 

Two Paths, Very Different Weight

The distinction between the Kalshi approval and the Coinbase staff letter matters more than it might look at first glance. Kalshi's BTCPERP is a Commission-issued order under Section 5c(c)(4) of the Commodity Exchange Act and Regulation 40.3. That is formal product approval, with binding legal weight and a clear compliance framework. Coinbase's route is different in kind. The Market Participants Division issued an interpretation and a no-action position in response to Coinbase Financial Markets. Staff confirmed that certain Deribit digital commodity derivatives may be categorized as foreign futures under Regulation 30.1, and said it would not recommend enforcement action under specified conditions tied to how customer digital assets and stablecoins are handled as margin through Coinbase affiliates.

 

Staff letters are conditional by design. The CFTC was clear: these positions represent the Market Participants Division only, are not binding on the Commission, and can be modified, suspended, or terminated. The Coinbase path is useful for reaching scale quickly because it connects U.S. clients directly to Deribit's existing liquidity pool, which is among the largest in global crypto derivatives. But it carries a thinner precedential footprint. Coinbase said institutional onboarding to Deribit options has already begun, with perpetual futures access and broader retail availability described as coming later, without a hard timeline. Retail access is expected to carry additional eligibility criteria and risk disclosure requirements.

 

The Liquidity Question Nobody Can Answer Yet

Regulatory clearance is the easy part. Getting traders to use a U.S. regulated perpetual when Binance, Bybit, and OKX offer the same exposure with deeper order books and, in most cases, higher leverage, is the actual test. Offshore exchanges process billions of dollars in Bitcoin perp volume on a slow day. The CFTC has been working toward this moment for over a year, issuing a formal request for comment in April 2025 on perpetual derivatives, their benefits, risks, market integrity implications, and customer protection questions. The approvals are, in that sense, the policy answer to the RFI. The market answer comes when Kalshi's BTCPERP goes live and traders decide whether regulated access at U.S. leverage limits is a compelling enough trade-off.

 

The CFTC's case-by-case stance on future perpetual approvals means the template is now set, but the runway is not yet cleared. Ethereum perps, Solana perps, and other digital assets with sufficient spot market depth could follow, but each application needs to clear the same review process independently. Kalshi separately indicated it plans to launch perpetual contracts on more than a dozen currencies pending additional regulatory reviews. CME's parallel push toward 24/7 crypto futures and options trading adds another dimension to the picture: traditional derivatives infrastructure is adapting to match crypto's always-on market structure, while crypto-native exchanges now have a formal path to operate inside U.S. regulatory boundaries. Whether the liquidity follows is a question of product quality, margin efficiency, and distribution reach, and none of that gets answered in an approval order.

 

The next signals are practical: Kalshi's launch terms and funding rate performance, Coinbase's timeline for rolling out perpetual futures through CFM, how retail access gets structured, and whether formal rulemaking eventually hardens the current agency posture into something more durable. For now, U.S.-regulated Bitcoin perps exist. Whether they can actually compete is the harder question, and the market will answer it faster than any regulator. It usually does.

 

Indonesia’s Ministry of Communication and Digital Affairs has blocked access to Polymarket, the world’s largest prediction market platform, and plans to block all social media accounts affiliated with it.

 

According to Alexander Sabar, Director General of Digital Space Supervision, platforms that facilitate money-based betting on specific outcomes or events are still categorized as online gambling, even if they are presented as prediction markets.

 

“The government will not allow any form of online gambling in Indonesia. Activities like Polymarket involve betting and speculation on uncertain outcomes, thus violating Indonesian law,” Sabar said in Central Jakarta, one of the country’s main administrative areas.

 

The agency also said the decision to block Polymarket is intended to protect younger users and the broader public in the digital space, and added that it will block access to other platforms that facilitate online gambling activities in the country.

 

Prior to the ban, Polymarket had a limited user base in Indonesia. However, it gained greater visibility between May 20 and 21 of this month when it launched a contract on whether President Prabowo Subianto would leave office early. The contract drew significant attention in Indonesian digital spaces, attracting roughly 51,000 dollars in trading volume within days of its launch.

 

Global Crackdown on Prediction Markets Continues

Regulators' crackdown on the activities of prediction market companies continues to intensify. Just last month, Brazil’s National Monetary Council (CMN), together with other government agencies and regulators, blocked Polymarket, Kalshi, and 27 other prediction market platforms from operating in the country. This came shortly after a court in Buenos Aires reportedly ordered a ban on Polymarket in Argentina.

 

Other countries in Europe, including France, Belgium, Germany, Italy, Poland, Portugal, and Hungary, have either banned or heavily restricted the activities of Polymarket, Kalshi, and other prediction market companies within their jurisdictions.

 

In the United States, several state regulators have taken action against prediction markets, with Minnesota most recently imposing a comprehensive ban on them. At least 17 states, including Illinois, New York, and Ohio, have issued cease-and-desist orders against prediction market companies.

 

 

South Carolina Governor Henry McMaster has signed a new pro-crypto bill into law that establishes a comprehensive regulatory framework for the use of cryptocurrencies.

 

The bill, known as Senate Bill S.163, was passed this week and creates a crypto-friendly environment for crypto use. According to the new law, individuals and businesses are no longer prohibited from accepting digital assets as payment or from using self-hosted or hardware wallets to store their crypto holdings.

 

By passing this pro-crypto law, the South Carolina government enhances the real-world utility of cryptocurrencies, especially in payment finance, and removes regulatory uncertainty associated with their use in commercial activities.

 

Since the newly enacted law exempts cryptocurrencies used for payment from any additional tax or government-imposed charges, it prevents merchants and businesses from discriminating against crypto transactions or against converting crypto into a tax-disadvantaged payment method. The result is that crypto moves further into the mainstream and its adoption increases.

 

The Anti-CBDC Portion of the Bill

Another important aspect of the newly enacted law is the anti-CBDC provision, which rejects the use of a government-controlled digital asset.

 

Under the new legislation, no state-level government parastatal, including agencies, boards, commissions, and departments, may accept or require payments in central bank digital currency (CBDC). The law also prevents these state-level entities from participating in any “digital asset” test conducted by the Federal Reserve.

 

The law also strongly supports crypto mining, prohibiting local governments from restricting mining in industrial zones or imposing any additional limits on mining companies beyond general noise pollution regulations.

 

South Carolina Becomes Latest Crypto-Friendly State

With these pro-crypto bills passed, South Carolina has joined other crypto-friendly states, such as Kentucky, Oklahoma, Arkansas, Florida, Mississippi, Montana, North Dakota, Louisiana, and Arizona, that have enacted similar laws.

 

In March of last year, Kentucky passed a pro-crypto bill, HB 701, into law. Just like South Carolina's new laws, the law allowed users to hold and use digital assets in self-hosted wallets or hardware wallets. The law also exempted digital asset mining companies from the requirement to obtain a money transmitter license or comply with securities regulations before operating in the state.

 

 

President Donald Trump's campaign promise of a Stretegic Bitcoin Reserve just took another step to being a reality today. A new piece of legislation making its way through Washington aims to permanently anchor the United States government's bitcoin holdings inside federal law, and adds in a mandatory two-decade lockup attached.

 

Representative Nick Begich (R-AK), joined by Democratic co-lead Representative Jared Golden (ME), introduced the American Reserve Modernization Act of 2026 on Thursday. Known as ARMA, the bill arrived in Congress with 17 original co-sponsors spanning both parties, a fact that backers have been quick to point out, given how often digital asset legislation...well almost all legislation lately, seems to stalls along partisan lines.

 

A Tighter Legal Framework Than an Executive Order

ARMA is essentially a legislative upgrade to the strategic Bitcoin reserve President Donald Trump established through executive order back in March 2025. That order told federal agencies to hold their seized crypto and stop the "fire sale" liquidations that characterized the prior administration's approach. But executive orders can be reversed. Statutes are a lot harder to undo, and that difference is at the heart of why Begich and his co-sponsors pushed for the bill.

 

"Administrations have auctioned crypto off or held it in reserve, according to the whims of the executive branch," Golden said in a statement. Under ARMA, that kind of discretion would be gone. The stockpile would carry "the weight of law."

 

The 20-Year Hold and the 1 Million BTC Target

Under the bill, the Treasury Department would be authorized to acquire up to 200,000 BTC per year over five years, targeting a total reserve of 1 million bitcoin, or roughly 5% of the asset's fixed supply. All holdings, including the approximately 198,000 to 328,000 BTC the government already controls from years of criminal forfeitures, would be subject to a hard 20-year minimum holding period. During that window, no bitcoin could be sold, swapped, auctioned, or otherwise disposed of, with one very narrow exception: if doing so would help reduce the national debt.

 

The government's existing stash came primarily from high-profile seizures including the Silk Road takedown and the 2022 Bitfinex hack recovery, in which the DOJ clawed back 94,636 BTC. A White House official, Patrick Witt of the President's Council of Advisors for Digital Assets, acknowledged at a recent conference that managing those holdings has been messy. "We've heard stories and confirmed some of them of cold wallets that were being stored in drawers of desks in various agencies," he said. ARMA would consolidate all federally held digital assets under Treasury oversight and require proof-of-reserve reporting to bring transparency to what is currently a very scattered procedure.

 

Budget-Neutral by Design, But Skeptics Remain

The bill's drafters say new bitcoin purchases would be funded through Federal Reserve remittances and other budget-neutral financial mechanisms, sidestepping the politically charged question of whether taxpayer money would foot the bill. That type of framing was important for bipartisan appeal, and it seemed to work, for the most part. There will always be skeptics when it comes to this bug of a shift in tradition U.S. monetary policy. Treasury Secretary Scott Bessent already threw cold water on agency-level purchases earlier this year, a signal that the White House and Congress may not be entirely aligned on the mechanics.

 

Begich drew a parallel to gold when defending the reserve concept to Fox Business. "When you look at gold, it is the dominant precious metal reserve," he said, making the case that bitcoin occupies an analogous role in the digital asset class. Strive CEO Matt Cole went further, calling ARMA "the single most important crypto legislation" that could emerge from Washington. A very dramatic statement, given the GENIUS and CLARITY Bills.

 

A Long Road Ahead

For all the bullish hype, ARMA is still just a bill. It needs committee action, alignment with a parallel Senate effort backed by Senator Cynthia Lummis, and floor votes in both chambers before it becomes law. The Senate Banking Committee recently passed the separate CLARITY Act with a 15-9 bipartisan vote, sending it to the Senate floor and setting a somewhat hopeful tone for crypto legislation broadly. We'll see whether that positive momentum carries over to a bill asking the federal government to buy and hold a trillion-dollar's worth of bitcoin for two decades.

 

At current prices, the U.S. already holds more than $25 billion in bitcoin, making it the largest national holder of the asset in the world. ARMA would formalize that position and potentially expand it dramatically. If Congress is ready to make this bet, in statute and for the long haul, is debatable. But even the discussion of doing something like this is extremely positive in my opinion.