Self-certification under fire
The first meeting of the CFTC's prediction markets advisory committee laid bare a split between the established exchanges and the newer platforms. CME Group CEO Terry Duffy warned that event contracts are open to manipulation. Kalshi COO Luana Lopes Lara defended the right to fast self-certification. More than 30 representatives attended, from Robinhood and Nasdaq to Polymarket.
Duffy attacked the procedure that lets platforms list contracts without prior approval from the regulator. Since January 2025, 2,500 self-certifications have been filed and not one has been rejected. 'Many of these products violate basic principles,' he said. He singled out mention markets — bets on what a public figure will say in a speech or on an earnings call. 'There are definitely people manipulating these contracts. It is terrible for the industry.' Robinhood CEO Vlad Tenev backed the call for a closer look at mention markets but stopped short of demanding a ban.
Lopes Lara said users want fast markets on current events. The exchange turned into a spat. She asked whether CME had ever faced manipulation. 'I have more people in my regulatory department than your entire company,' Duffy said. 'Maybe you should learn efficiency,' she replied. 'And you should learn what a serious market is,' Duffy closed.
Federal jurisdiction, and a lawsuit
CFTC chair Michael Selig set out a three-stage roadmap for regulation and said jurisdiction over prediction markets sits with the federal regulator alone, not with the states. In July New York Attorney General Letitia James sued Kalshi for illegal gambling. Selig called officials of that kind 'bandits' who are pushing the market offshore. The industry is also facing insider trading probes: bets tied to the capture of Venezuela's Nicolás Maduro and to statements by President Donald Trump drew scrutiny.
