Home / Business and Economy / Regulators Assert Power Over Prediction Market Trading
Regulators Assert Power Over Prediction Market Trading
26 Feb
Summary
- CFTC claims authority to police illegal trading in prediction markets.
- Kalshi flagged two insider trading cases and froze accounts.
- Justice Department official notes prediction markets are ripe for enforcement.
The U.S. Commodity Futures Trading Commission (CFTC) has declared it possesses the full authority to regulate illegal trading activities within prediction markets. This assertion follows an announcement from Kalshi, a prominent firm in this sector, stating that it had identified and subsequently frozen trader accounts involved in two instances of insider trading.
These nascent markets are facing increasing scrutiny regarding potential misconduct. Notably, a high-ranking official from the Justice Department recently highlighted these markets as particularly vulnerable to enforcement actions. State gaming regulators have also been actively involved in overseeing these platforms, which present competition to traditional betting establishments and casinos.
The CFTC's stance was further solidified in a court filing last week, where the agency asserted exclusive jurisdiction over such markets. This move escalates an ongoing dispute with various states over regulatory control. Companies registered with the CFTC, like Kalshi, typically bear responsibility for monitoring their markets for misconduct and reporting any findings to the agency.
