In the week of May 21, 2026, U.S. regulators and the primary market took simultaneous action on three seemingly disparate fronts: On one side, SEC Chairman made a rare call for public feedback on a prediction market ETF targeting event outcomes, disclosed by Bloomberg ETF analyst Eric Balchunas on the X platform, indicating that the regulators have put a long-considered event contract product on the public discussion table for the first time; On the other side, Democratic and Republican lawmakers Steven Horsford, Max Miller, Suzan DelBene, and Mike Carey joined forces to bring back the previously stalled crypto tax reform agenda, requiring the IRS to study a "tax exemption mechanism for small crypto transactions" through the "Equality Act," attempting to redraw a line between compliance and usability; At the same time, SpaceX formally submitted an S-1 registration statement to the SEC, revealing approximately $4.69–4.7 billion in first-quarter revenue and a high voting power structure, while SB Energy, under SoftBank, which has previously received joint investment from OpenAI and SoftBank, chose to submit an IPO registration draft to the SEC in secret; the two heavy-asset tech infrastructure companies almost simultaneously expressed their intentions to raise funds under the SEC framework rather than on-chain. Putting these three matters together, the U.S. is simultaneously reshaping three critical boundaries: how crypto derivatives and event contracts are incorporated into securities regulation, whether everyday crypto payments can be treated as "tax-exempt small transactions" in tax law, and whether AI and digital infrastructure assets are more inclined to enter the stock market rather than token financing paths; what is truly being reordered are the speculative and payment spaces for crypto retail investors, the compliance allocation pathways for institutional funds, and the path choices for Web3 projects between "issuing tokens" and "entering the SEC system."

Prediction Market ETF is Named: How SEC Defines Risk Boundaries

Compared to traditional ETFs that track indexes or commodity prices, prediction market ETFs directly package "whether a certain event occurs" into a tradable asset, essentially moving event contracts into brokerage accounts. This structure has a natural connection with on-chain prediction markets: both price outcomes based on verifiable future results, except the former appears as an ETF shell under the SEC framework, while the latter mainly circulates as tokenized contracts on-chain. Once a cross-market arbitrage and pricing linkage is established, regulators no longer see it as an isolated innovative product but as an entire "speculative chain from on-chain to Wall Street." It is precisely because of this that the binary nature of event outcomes and the winner-takes-all feature of expiry settlements make it closer to highly leveraged gambling, addressing a whole series of compliance-sensitive points from anti-money laundering to market manipulation.

Against the backdrop of years of cautiousness about event contract products and repeated questioning or limiting their listing, this time, SEC Chairman's public solicitation of feedback on a prediction market ETF is seen as the first time pulling such products into systematic discussion within the federal securities regulatory framework. One side focuses on "investor protection"—worrying that the ETF guise might obscure high-risk speculation, misleading retail investors into viewing policy outcomes and significant social events as investable assets; the other side emphasizes "financial innovation"—arguing that if the licensing path is completely blocked, liquidity will only continue to be pushed toward anonymous on-chain markets. More complex is that event contracts resemble both securities and derivatives, and the market generally believes they straddle the jurisdictional gap between the SEC and CFTC: if the SEC chooses to "incorporate" after this round of feedback solicitation, on-chain prediction markets and crypto derivatives platforms may be required to disclose risks, limit event types, and position sizes similar to securities products, giving traditional market-making institutions the opportunity to establish cross-market pricing within the compliance framework; if the SEC insists on a hard rejection or emphasizes the lack of public offering attributes, it will mean, on the one hand, that on-chain prediction markets and related derivatives platforms will continue to grow rapidly in a gray area, and on the other hand, it will increase the uncertainty of them being treated as "unregistered securities or unregistered derivatives markets," which is itself the core risk that all participants currently find hardest to price due to ambiguous boundaries.

Crypto Tax Reform Resurfaces: Who Benefits from Tax Exemption for Small Transactions

In the same week that regulators publicly discussed the boundary of prediction market products, another line tightly connected to crypto was reignited in the U.S. Congress—the "Equality Act," jointly submitted by lawmakers Steven Horsford, Max Miller, Suzan DelBene, and Mike Carey, returned to the forefront of the agenda. Compared to the previous Congress's failed attempt at crypto tax reform, this version of the bill has a more direct ambition: to "reduce the burden" regarding the usage and reporting of crypto assets, pushing to simplify tax reporting rules on one hand, while attempting to lower the compliance costs for individuals and institutions when using crypto assets for payments, settlements, or participating in on-chain agreements on the other, aiming to replace the current large gray areas with the predictability of the tax system. Some reports referred to this bill as the "Parity Act," but this English abbreviation has not yet been officially confirmed, reflecting that the legislative narrative is still taking shape.

What truly affects retail investors is the clause in the bill requiring the IRS to study a "tax exemption mechanism for small crypto transactions." For U.S. users frequently using on-chain applications, each coffee payment, in-game asset trade, and DeFi position adjustment may currently be seen as a taxable event under the existing framework, with reporting costs far exceeding the transaction itself; if the bill ultimately encourages the IRS to define a tax-exempt interval for such "small" scenarios, it means on-chain payments and interactions will no longer equate to "each time pressing the confirmation button incurs another tax reporting record." However, the current public text does not specify any concrete monetary thresholds or clarify which types of protocol interactions can be considered "tax-exempt use" rather than "speculative trading," which is both a technical difficulty in advancing legislation and a main battlefield of interest competition: if the threshold is set too low, the burden reduction effect will be limited; if it is set too high, it will provoke political resistance to "encouraging tax evasion." The bipartisan joint proposal indicates a fundamental consensus between the two parties on "giving compliance users more relief," yet it is far from guaranteeing the smooth passage of the bill; what truly determines its fate is whether Congress can form a sufficient stable political compromise regarding tax exemption limits and applicability that can withstand fiscal scrutiny.

SpaceX Submits S-1: How Musk Accepts SEC Constraints

In the same week, SpaceX formally submitted an S-1 to the SEC, meaning this high-investment tech infrastructure company has moved beyond living solely within the myth of private equity and secondary market quotations, stepping into the realm of public offerings subject to U.S. securities law. The prospectus reveals its first-quarter revenue of about $4.69–4.7 billion, but it remains in an overall loss state, clearly laying out the true financial profile of "high growth and high burn" before regulators and the public. More crucially, post-IPO, Musk will still retain about 85% of the voting power; this structure of "highly concentrated control + dispersed public equity" will cause SEC constraints to manifest more in information disclosure and market behavior compliance rather than in traditional shareholder checks and balances: future investment in rocket launches, Starlink satellite broadband, and AI computing capacity infrastructure will need to continuously undergo SEC review and capital market pricing through quarterly reports, significant matter disclosures, and risk factor forms.

Once listed, SpaceX will passively become the valuation anchor for all "space internet + digital infrastructure" stories, with the secondary market using its sales ratio, market capitalization, and revenue growth rate to reassess other similar assets, including AI and energy infrastructure companies preparing for IPOs. For the crypto sphere, this anchoring effect will also reflect sentiment: funds that previously relied on on-chain assets to bet on "Musk narratives," "satellite internet," and "AI computing" will see the same mainline subjected to standardized valuation ranges under SEC frameworks for the first time, thereby re-evaluating the risk-return ratio of "holding shares" versus "holding on-chain assets." When a unicorn like SpaceX actively accepts continuous SEC supervision and governance requirements instead of choosing to issue tokens for financing, it is essentially signaling to the market—at least in the U.S., the most narratively compelling tech infrastructure assets are being prioritized for incarceration within the cage of securities regulation, which will become a key reference point in assessing how much premium space crypto narratives can still retain.

SB Energy's Secret IPO: Compliance of AI Energy Assets

Unlike SpaceX's public submission of the S-1, SoftBank has chosen to quietly push another "AI infrastructure chip" SB Energy onto the same regulatory track. SB Energy itself serves as a vehicle around digital infrastructure and energy layout, directly connecting to the real electricity and construction needs of AI computing and data centers, having recently obtained joint investment from SoftBank and OpenAI, but the amount is deliberately not disclosed, effectively locking it within an asset pool from an institutional perspective with "mysterious valuation + top shareholders." Now, the company plans to submit an IPO registration draft to the SEC in a secret manner according to SEC rules, which will not be open to the public before it formally takes effect, buying time for SoftBank and management to adjust the narrative and structure, also preventing the market from prematurely making "on-chain-style" emotional valuations regarding valuation and business models.

For regulators, once SB Energy takes this route, the logic parallels that of SpaceX: whether publicly disclosing the S-1 or secret drafts, if they want to sell energy assets closely related to AI computing to retail investors, they must accept unified discipline from the SEC regarding information disclosure, corporate governance, and ongoing compliance, and the issuance scale and actual clock-striking time points must be weighed back and forth between market sentiment, valuation window, and SEC review progress. For the market, a more tangible signal is that, even if the business aligns closely with "on-chain narratives," participants within the SoftBank system and OpenAI still prioritize equity financing under the SEC framework rather than issuing tokens directly to raise funds on-chain, which will compress the imaginative scope of the "AI + computing + energy" story in the crypto world; for crypto retail investors, the compliance battleground for betting on this track is quietly shifting from wallet interfaces to SEC-regulated stock accounts.

Signals from SpaceX and SB Energy's SEC Queue

Looking back at the intertwined events of the week: the prediction market ETF pausing at the SEC's public solicitation for feedback, the "Equality Act" just being reintroduced in this Congress, and the S-1 of SpaceX along with SB Energy's secret IPO draft entering SEC reviews one after another, there's a clear mainline—Washington is trying to reshape "what is a security, what are event derivatives, and how are on-chain transactions taxed" within the same timeline. For crypto retail investors, whether the prediction market ETF can pass determines whether you access event contract risks through regulated brokerage accounts or continue to face compliance uncertainties on-chain; if tax reform progresses, the small transaction tax exemption mechanism is expected to alleviate reporting pressures for daily use but also means being included in a more refined IRS monitoring network. For Web3 projects, SpaceX and SB Energy opting for financing AI and digital infrastructure under the SEC framework rather than issuing tokens signals that for those wanting to tell "tech infrastructure stories," regulators prefer to see registered stocks, prospectuses, and continuous information disclosures, while the space for token circumvention of securities laws is being squeezed. Traditional institutional funds gain a more predictable path—waiting for the prediction market ETF's voting results, observing the course of tax reform legislation through multiple committee reviews, and then combining the IPO rhythm of these two unicorns to decide whether to take exposure to crypto and AI infrastructure through compliant stocks and ETFs or continue to reduce allocations to on-chain assets; these undetermined timelines will collectively outline the compliance boundaries and funding battlegrounds for crypto and AI infrastructure assets in the coming years.

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