CME’s Duffy Clashes With CFTC and Kalshi Over Prediction Market Oversight

A CFTC Innovation Advisory Committee meeting on Thursday revealed growing tension between traditional exchanges and prediction market platforms over how the fast-growing sector should be regulated. CME CEO Terrence Duffy raised concerns about manipulation risks tied to self-certified contracts, including those linked to political events, prompting a public exchange with CFTC Chair Michael Selig.

Duffy Raises Manipulation Concerns

Duffy argued that certain event contracts remain vulnerable to manipulation, warning this could damage the industry’s credibility. Selig pushed back, noting the specific contracts Duffy referenced were not listed in the US. The two continued to spar over the issue during the session.

Industry Tensions Escalate

The disagreement deepened when Kalshi COO Luana Lopes Lara questioned whether CME had faced its own manipulation issues, leading to further sharp exchanges with Duffy. The clash comes as regulators and state officials continue debating jurisdiction over prediction markets, alongside rising concerns in Washington over possible insider trading on platforms like Kalshi and Polymarket.