SEC reviewing implications of delayed prediction market ETFs, Atkins says
Quick Take
- SEC Chair Paul Atkins said he instructed the agency’s staff to seek public input on prediction market ETFs.
- Atkins confirmed that the agency has delayed the effectiveness of ETFs tied to event contracts.
We'd love your feedback.
The U.S. Securities and Exchange Commission will soon seek public input on how the agency should treat novel exchange-traded funds, including those based on event contracts.
Chairman Paul Atkins said in a Wednesday statement that the SEC is evaluating 'novel questions' raised by new types of ETFs that have emerged recently, including event contract ETFs.
"I appreciate the willingness fund sponsors have shown in delaying the effectiveness of a number of novel ETFs, including event contract ETFs" Atkins said. "To ensure we do this in a transparent and thoughtful manner, I have instructed the staff to seek input from the public on how the Commission should respond to recent market changes."
Atkins' latest statement confirms that the agency has delayed making a decision on the first wave of prediction market ETFs tied to political and economic outcomes.
According to earlier reports, the delay affected 24 ETFs from issuers including Bitwise, Roundhill, and GraniteShares that were initially set to go live earlier in May. Filings for the funds were submitted in February and were nearing the end of a 75-day review window.
These applications follow the massive success of Polymarket and Kalshi, which collectively surpassed $25 billion in monthly trading volume in April, boosted by regulatory guidance and support from U.S. federal regulators.
The proposed funds seek to give investors exposure to outcomes tied to the 2028 U.S. presidential election, tech-sector layoffs, and the likelihood of a recession.
They inherently hold higher risks than ETFs tied to market benchmarks or cryptocurrencies, as the filings warn that investors could lose "substantially all" of their investment if the outcomes go against them.
"The commission is clearly wrestling with these and wants more time and input," Bloomberg Senior ETF Analyst Eric Balchunas said on X. "These are a whole new thing (kinda like crypto) and want to feel comfortable [before] they open the barn door."
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
© 2026 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
