CFTC Committee meeting highlights divisions over prediction markets
CME Group CEO Terry Duffy warned that some event contracts could be vulnerable to manipulation, while Kalshi defended the speed of self-certification.
US.- The Commodity Futures Trading Commission’s (CFTC) first Innovation Advisory Committee meeting has highlighted divisions over how prediction markets should be regulated. More than 30 representatives from financial and technology companies, including CME Group, Robinhood, Nasdaq, Polymarket and Kalshi, discussed self-certification, market manipulation, insider trading and consumer protection at the event.
CME Group CEO Terry Duffy criticised the CFTC’s self-certification process, under which platforms can list event contracts without prior agency approval. “There’s been 2,500 self-certifications since this administration took office in January of 2025, of which none have been opposed,” Duffy said. He argued that some products violate the agency’s core principles.
Duffy also raised concerns about “mention markets,” which allow users to trade on what public figures may say during speeches or earnings calls. “There are definitely people that are manipulating these contracts,” he said, while Robinhood CEO Vlad Tenev also called for closer scrutiny of the markets.
Kalshi Chief Operating Officer Luana Lopes Lara defended self-certification, saying platforms need to be able to launch markets quickly. Lopes Lara questioned Duffy over market manipulation, with the two executives exchanging differences of opinion over regulatory resources and the credibility of the markets.
CFTC Chairman Michael Selig outlined a three-part regulatory roadmap covering prohibited event contracts, reporting requirements for fully collateralised contracts and rules governing how designated contract markets list contracts and protect consumers. “We’ve heard the concerns of public commenters about inadequate consumer protections for retail loud and clear,” Selig said.
Selig also reiterated the CFTC’s position that it has exclusive jurisdiction over prediction markets, putting the agency at odds with states that argue some contracts constitute gambling. He criticised New York Attorney General Letitia James over the state’s lawsuit against Kalshi, saying federal prediction markets should be protected from state challenges.
