Prediction markets face a state and federal clash
On October 27, the CFTC sued Utah to stop the state from using gambling laws to restrict CFTC-registered prediction markets. Utah had filed a civil case against Kalshi on October 20. The CFTC says the Commodity Exchange Act gives it exclusive authority over derivatives traded on federally registered markets. Utah argues that event contracts on sports and other subjects are gambling that it can prohibit. On October 28, Utah filed criminal charges against Kalshi and co-founders Tarek Mansour and Luana Lopes Lara. Kalshi disputes the claims and calls the prosecution overreach. No defendant has been convicted. Prediction-market operators should not assume federal registration removes all state-law risk. Geolocation, marketing and executive exposure still need state-specific review.
FCA court undertakings limit HTX UK activity
On October 29, the FCA announced a settlement in its High Court case against HTX, formerly Huobi. Court undertakings bar Huobi Global from knowingly communicating unlawful cryptoasset promotions to UK consumers, directly or indirectly. The limits cover websites, apps and social media. The FCA began the case in October 2025, alleging breaches of UK financial-promotion rules and repeated failures to engage. HTX has moved to exit the UK. New UK users cannot register, deposits are unavailable and the firm may not target UK consumers. The confidential settlement is not an admission of liability. An offshore base may not protect an exchange whose promotions reach UK users. Platforms should check affiliate links, ads and social accounts in markets they claim to have left.
UK proposes stablecoin and DeFi tax changes
The October 28 Budget confirmed plans for Finance Bill 2026–27 legislation to treat certain stablecoins more like money for tax purposes. The change is proposed, not enacted, and could take effect in April 2027. Eligible stablecoins would need a fiat peg, backing assets, wide availability and a payment design. Individuals and trustees would be exempt from Capital Gains Tax on disposals, while interest-like lending returns would count as savings income. Companies would generally use loan-relationship rules. Not every token called a stablecoin will qualify. A separate proposal would defer CGT for qualifying crypto lending and liquidity-pool transfers from April 6, 2027 on a no gain, no loss basis until an economic disposal. It applies to defined arrangements, not every DeFi protocol. Good wallet and transaction records will matter.
DOJ charges six in alleged NFT scam
On October 27, the Justice Department charged six people over an alleged $NFT investment fraud operation based in Madagascar and tied to actors in Southeast Asia and China. Prosecutors say participants used dating platforms and fake personas to build trust, then sent victims to fraudulent investment sites. Victims were allegedly persuaded to connect and fund wallets before assets were removed. Investigators linked about 74 wallets to roughly 800 reported victims. The DOJ also unsealed a warrant used to seize websites. Its Scam Center Strike Force says it has restrained more than $1 billion tied to crypto fraud and seized 700 fraudulent sites. The defendants are presumed innocent. Victims should preserve wallet addresses, transaction hashes, domains, messages and exchange communications.
