He warned that the lack of clear regulations is leaving regulators 'handcuffed' as the market continues to evolve, complicating oversight.

As the 2024 election approaches, prediction markets like Kalshi and Polymarket are thriving, highlighting ongoing debates about regulation and market integrity.

Kalshi recently won a court case allowing it to resume betting on the 2024 U.S. presidential election, despite the CFTC's objections.

Concerns have been raised about potential market manipulation and foreign influence on betting odds, with billionaire Mark Cuban highlighting these risks.

Behnam emphasized that without a defined legal framework, the CFTC struggles to protect investors and risks exposing markets to bad actors.

Kalshi's regulatory compliance stands in contrast to Polymarket's gray market operations, which have faced criticism for lacking proper oversight.

Rostin Behnam, chair of the Commodity Futures Trading Commission (CFTC), has urged Congress to take a more active role in regulating cryptocurrency and election betting legislation.

During the Securities Industry and Financial Markets Association's annual meeting, Behnam expressed doubts about Congress passing crypto legislation in 2024, indicating that significant progress may not occur until 2025.

The CFTC is currently in a legal dispute with Kalshi over its right to offer election contracts, adding complexity to its regulatory challenges.

Behnam revealed that the CFTC is utilizing artificial intelligence to enhance market policing and detect manipulation and cyberattacks.

Behnam's comments underscore the urgent need for Congress to focus on regulating crypto assets and election betting to protect investors and ensure market integrity.

Current legislative efforts, such as the Financial Innovation and Technology for the 21st Century Act (FIT 21), are stalled, hindering progress in defining digital asset regulations.