The Commodity Futures Trading Commission (CFTC) announced a lawsuit against the state of Utah, seeking an injunction that would stop Utah from using its gambling statutes to limit CFTC‑registered prediction‑market operators. The legal action follows Utah’s recent civil enforcement against Kalshi and related entities and escalated criminal charges against the firm’s founders, marking a rare instance of a federal regulator suing a state over jurisdictional authority. At the same time, the United Kingdom unveiled two tax‑policy proposals that would reshape the treatment of stablecoins and crypto‑lending activities, aiming to align digital‑asset taxation with economic substance.

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CFTC vs. Utah: Federal Preemption Claim

According to Bitcoin.com News, the CFTC argues that the Commodity Exchange Act grants it exclusive jurisdiction over derivatives traded on federally registered contract markets, preempting any conflicting state regulation. Utah contends that event contracts involving sports and other subjects constitute gambling that the state may prohibit. The dispute intensified after Utah filed criminal charges on October 28 against Kalshi co‑founders Tarek Mansour and Luana Lopes Lara, alleging violations of state gambling laws and a pattern of unlawful activity. Kalshi has denied the allegations, describing the prosecution as regulatory overreach. The CFTC’s lawsuit seeks to block Utah’s enforcement actions, emphasizing that federal registration does not automatically shield operators from state‑law risk, and urging courts to clarify preemption boundaries.

UK Moves to Tax Stablecoins Like Money

The UK’s October 28 Budget included a proposal to treat certain stablecoins as money for tax purposes, pending enactment in the Finance Bill 2026‑27. The draft rules would require eligible stablecoins to maintain a fiat‑pegged value, be backed by fiat or comparable assets, be widely available, and be designed for payment use. For individuals and trustees, disposals of qualifying stablecoins would be exempt from Capital Gains Tax (CGT), while interest‑like returns from stablecoin lending would be taxed as savings income. Companies would apply corporation‑tax loan‑relationship rules to stablecoin holdings. The proposal aims to simplify tax reporting for frequent payments and settlements, though it excludes algorithmic tokens, narrowly distributed instruments, and non‑payment‑focused tokens.

Proposed Deferral of CGT on Crypto Lending and Liquidity Pools

In the same Budget, the UK government outlined a separate tax reform that would place certain crypto‑lending and liquidity‑pool transfers on a “no gain, no loss” basis starting April 6 2027. Under the plan, Capital Gains Tax would be deferred until participants make an economic disposal of the underlying cryptoasset, addressing concerns that current rules tax the initial transfer into a DeFi protocol despite continued exposure. The deferral would apply only to qualifying arrangements, with eligibility determined by documentation, token rights, withdrawal mechanics, and whether a replacement asset is received.