The U.S. Commodity Futures Trading Commission published an advisory on September 22 warning that mention markets — prediction-market contracts where users bet on whether a public figure will say a specific phrase during a speech — are vulnerable to manipulation. The document followed last month's three-year trading ban imposed on Gabriel Perez, a former teleprompter operator for President Donald Trump, who placed illegal bets on mention markets tied to Trump's speeches using advance knowledge of their content.
The CFTC said mention markets are exposed to misconduct because the outcome depends on a single person's action and often cannot be 'independently generated' or 'verified externally'. Prediction markets must comply with 23 core principles as Designated Contract Markets, including Core Principle 3, which bars contracts susceptible to manipulation. The regulator expects operators to implement 'preventive trading rules' to detect and stop misconduct. The advisory carries no binding legal force.
New York v. Polymarket and Kalshi
New York Attorney General Letitia James, who sued Kalshi in July, added Polymarket to the list of defendants this week. The state accuses the platform of unlicensed gambling and is seeking $4.6bn. Governor Kathy Hochul, running for a second term in November, highlighted that Polymarket allows users aged 18 to 20 to trade contracts, though New York's sports-betting age floor is 21. Polymarket moved the case to federal court and filed a countersuit. By comparison, the state is seeking $36bn from Kalshi.
Separately, Kalshi faced allegations of wash trading on crypto perpetual futures. A Wall Street Journal analysis found that a third of perps trades over the past month consisted of identically sized orders of $5,500 each, totalling $5bn in volume. The platform denies wrongdoing, saying it mechanically blocks self-trades and monitors collusion. The CFTC has neither confirmed nor denied an investigation.
