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According to Bloomberg, the Commodity Markets Council, representing derivatives exchanges such as CME Group and commodity traders, has informed the U.S. Commodity Futures Trading Commission (CFTC) that perpetual futures pose significant risks to market integrity, urging regulators not to approve the perpetual oil futures contract proposed by prediction market platform Kalshi. The organization also called on the CFTC to plug regulatory loopholes to prevent retail investors from accessing offshore trading platforms through this channel.
Odaily News CME Group Chairman Terry Duffy, the operator of the world's largest futures exchange, and Luana Lopes Lara, co-founder of prediction market platform Kalshi, clashed verbally during a U.S. Commodity Futures Trading Commission (CFTC) roundtable in Washington. Duffy questioned whether prediction markets face the same regulatory scrutiny as established exchanges and noted that certain contracts could be subject to manipulation.Terry Duffy stated that CME Group is not a "barker at the circus" and mocked some contracts offered by Kalshi, including the Nathan's Hot Dog Eating Contest contract. Luana Lopes Lara responded that traditional markets and exchanges carry risks as well and that regulators are responsible for identifying and addressing such issues. DraftKings CEO Jason Robins subsequently called on both sides to stop attacking each other's business models.The dispute comes amid ongoing disagreements between federal regulators and states over the regulatory authority of prediction markets, with the central question being whether contracts involving sports, elections, and other real-world events are federally regulated derivatives or gambling products subject to state law. Last week, a Washington state judge ordered Kalshi to stop offering certain contracts. Two days ago, the CFTC instructed Kalshi to continue trading, pushing back against New York state's efforts to block its contracts. (Decrypt)