World Economy

CFTC Warns Exchanges on Manipulation Risks in 'Mentions' Prediction Markets

The Commodity Futures Trading Commission cautioned regulated exchanges Tuesday that prediction market contracts based on specific words used in speeches, earnings calls and broadcasts face heightened manipulation risks. The CFTC said the contracts are vulnerable to exploitation because their settlement depends on discrete conduct that may not be independently generated or externally verifiable. The agency issued guidance to designated contract market entities on listing standards for mentions contracts under the Commodity Exchange Act, without imposing new regulatory obligations. The warning follows an internal agency review that CNBC reported on in August. Trading platform Kalshi subsequently withdrew its sports-related mentions offerings. The scrutiny intensified after a Trump administration teleprompter operator profited from mentions contract trades on Kalshi. The operator settled with the CFTC in August, paying a $172,539 fine for insider trading violations.