CFTC Gains Kalshi Control, Polymarket Announces Major Upgrade, Toss Bets on Native Blockchain, Digital Assets Shift Oversight, and more...

Good morning, it's April 7th and this is your daily brief in crypto, here's everything

you need to know.

A federal appeals court has ruled that the CFTC holds exclusive federal jurisdiction over

CalShees event contracts, blocking new Jersey regulators from restricting bets on sports

events.

The decision highlights ongoing debates about where prediction markets fit within legal

frameworks and raises questions about manipulation and gambling boundaries.

This ruling stands as a major win for CalShees amid broader tensions with state regulators

seeking licensing and compliance for activities accessible from multiple jurisdictions.

Prediction markets cover a wide range of outcomes and have faced concerns about insider trading,

with profits concentrated among a small subset of users.

The ruling signals to the industry that prediction markets can be legitimate financial instruments

rather than gambling, potentially boosting institutional adoption.

There is potential for further action, as the dissent notes a possible re-hearing on

bank and New Jersey could seek further review within two weeks.

The decision could accelerate nationwide growth of prediction markets, reduce regulatory

fragmentation, and pave the way for broader applications beyond sports, while other circuits

have issued mixed rulings.

There are notable political connections to CalShees and related platforms, including high-profile

figures associated with the company and planned initiatives.

Experts expect the ruling to broaden CalShees' geographic availability and set a regulatory

precedent for similar platforms.

The story sits within broader political and regulatory debates about prediction markets,

including state actions and comments from lawmakers.

Prediction markets are touted for transparency and information aggregation, with proponents

arguing they reflect collective insight more efficiently than polls.

The ruling has implications for other states and platforms offering event-based contracts,

signaling a move toward centralized federal standardization.

Polymarket is rolling out its most significant infrastructure upgrade yet, centered on a

rebuilt trading system, new smart contracts, an updated central-limit order book, and

a native collateral token called Polymarket USD backed 1-1 by USDC.

The upgrade also includes the CTF Exchange 5-2, which brings faster order matching,

a simplified order structure, support for EIP1271 signatures for smart contract wallets,

account abstraction, and improved fee handling.

Polymarket USD will replace bridged USDC.e across the platform to tighten settlement control,

improve liquidity consistency, and simplify on-chain activity.

This move comes after ongoing controversy around geopolitically-themed markets and scrutiny

of how outcomes are resolved in prediction markets.

All existing order books will be cleared and trading paused briefly during a scheduled

maintenance window, with timing announced in advance.

Open orders will be cancelled during a short maintenance window, with at least one week

of advance notice.

Full rollout is expected to take 2-3 weeks.

In migration, order books will be cleared again, and developers with bots or SDKS must

update to the new order structure and resign orders.

The upgrade occurs in the context of competitive pressure from Kalshi, Coinbase, Crypto.com,

and DraftKings, and Polymarket is pursuing additional capital at a near $20 billion

valuation, though no POLY token details are provided in the announcement.

For everyday users, changes should be mostly seamless, with traders likely noticing smooth

their performance and faster order execution.

The POLY governance token air drop, confirmed previously, remains separate and contingent

on a strong U.S. relaunch.

No POLY details or timelines are given in this release.

The block notes, Polymarket is backed by intercontinental exchange, tracing its launch to 2020

and ongoing fundraising referenced but not detailed.

Historically, Polymarket used UMA's optimistic oracle for outcome resolution.

The new approach could internalize resolution to some extent and address concerns about

governance influence.

Toss, a leading South Korean FinTech, is pursuing a native blockchain mainnet and a built-in

token to fuse payments and financial services into one ecosystem.

The final design hinges on regulatory developments, including South Korea's digital

asset basic act governing token issuance, stablecoins, and crypto ETFs.

Toss is leveraging its regulatory know-how-to-navigate compliance and plan a phased rollout

as rules evolve.

A layer 1 mainnet offers control over fees and governance but requires substantial investment,

while Ethereum-based layer 2 options could deliver faster initial scalability.

The company is exploring both layer 1 and layer 2 approaches, potentially adopting

a hybrid model with a primary chain and scalable layer 2 solutions to boost liquidity and

performance.

A phased implementation is envisioned, spanning technical development, regulatory review,

pilots, and gradual rollout with no specific dates yet.

The rollout could unfold in stages, 6-12 months of development and testing, 3-9 months

for regulatory review, 3-6 months for pilots, and 6-12 months for broader deployment.

The details originate from block media, which cites an unnamed toss source, with the

block seeking comment from Toss.

Overall, Toss is signaling a bold convergence of traditional finance and blockchain within

an integrated user-oriented ecosystem, though timelines and technical specifics are still

uncertain.

Toss is weighing a native layer 1 mainnet and a potential layer 2 for scalability, but

has not settled on which path to pursue.

As February 2026, Toss has been actively building a blockchain team, hiring for wallet

design, node operation, APIs, and cryptographic security, and is developing a Web3 wallet

integrated into the Toss app.

The company is recruiting blockchain engineers to support wallet systems, API and transaction

processing, node operations, cryptographic signing, and regulatory compliance with the

aim of a seamless and app Web3 wallet.

A federal framework for digital assets is moving forward, aiming to clarify who

regulates what and set standardized disclosures for crypto issuers.

The Clarity Act would shift primary oversight from the SEC to the CFTC for most crypto

markets, creating a clearer path for exchanges, issuers, and participants.

The proposal, once known as the Clarity Act and having cleared the house, seeks a complete

framework for cryptocurrencies and reorganized regulatory authority.

Including Coinbase's Paul Gruel, say, progress is being made on contentious topics like

stablecoin yield, even as major policy hurdles remain.

There is a sense that significant questions still hang over how the regime will handle tokenized

assets and non-custodial protocols.

Sen-Haggerty warns there is a narrow window to advance market structure legislation before

the 2026 midterms, suggesting April progress could influence crypto politics this cycle.

Capitalism is driven by mid-term pressure, intensified lobbying, international competition,

and ongoing judicial developments highlighting regulatory gaps.

Responses from regulators, industry groups, and consumer advocates are mixed, balancing

innovation and protection with calls for workable amendments and nuanced disclosures.

Intercommittee Dynamics add complexity, as the Agriculture Committee has advanced its

version and coordination is needed before a Senate floor vote.

These sticking points to watch include stablecoin yield, tokenized assets, and how regulatory

authority is split between the SEC and CFTC.

Overall movement signals a strategic push to establish a stable regulatory foundation for

U.S. digital assets with negotiations ahead and mid-term dynamics shaping timing.

Regulatory clarity is poised to impact exchanges, issuers, and investors under political pressure

to move quickly.

Every reaction is cautiously supportive, as exchanges prepare for compliance, while

DeFi participants watch how non-custodial protocols will be addressed.

Experts say the bill would enable broader regulatory progress not solve all issues.

Russia is moving to formalize crypto with three draft bills in the state Duma that would

recognize digital assets as both payment and investment tools and set clear liabilities.

Prime Minister Michuston says the goal is to build a domestic crypto infrastructure, curb

anonymous and illegal activity, and reduce tax evasion linked to digital assets.

The bill's aim to guide exchanges and custodial platforms, formalize activity, and limit

illicit use of crypto within the market.

Analysts describe the approach as controlled regulation rather than a ban, noting a vat

exemption that signals ongoing innovation under strict oversight.

The industry expects a market purge, with many Russian exchanges likely to close if they

can't meet new legalization requirements, skeptics like CIFRA markets warn that numerous

platforms may shutter.

Observers see potential global implications, including possible inspiration for other nations

and questions about linking Russian assets to DeFi via Ethereum, as well as how quickly

exchanges will adapt and how tax enforcement will roll out.

For everyday Russians, the framework would offer safer access to crypto through a yearly

cap and local platforms, while professionals could access larger portfolios with taxation

supporting public revenues.

Penalties for illegal use include fines and potential bans from operating unapproved exchanges

for up to two years, signaling a push toward licensed platforms.

The regime requires crypto transactions to pass through regulated intermediaries, with

foreign purchases allowed only via approved intermediaries, and trading without intermediaries

prohibited.

Cross-border crypto activity is governed, with all Russian transactions routed through

licensed intermediaries and specific rules for foreign dealings.

The outlook is for ongoing debates, tweaks, and rollout as Russia moves toward a regulated

crypto future, encouraging investors to learn the rules, pass necessary tests, and use

licensed platforms.