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CFTC warns prediction market “mention” contracts carry manipulation risk
The CFTC said “mention markets” can be listed only in limited circumstances, citing heightened manipulation risk tied to unverifiable personal conduct.
The US Commodity Futures Trading Commission warned exchanges about manipulation risks tied to prediction market “mention” contracts, which settle based on what a person says or does.
According to the CFTC’s Division of Market Oversight, the regulator issued an advisory to some regulated entities saying there are only “limited circumstances” where “mention markets” can be listed in a way consistent with the Commodity Exchange Act.
The CFTC said these contract types face heightened manipulation risk because settlement depends on discrete conduct by a person that may not be independently generated or externally verifiable.
The warning comes after prior cases involving traders accused of exploiting privileged information on prediction markets, including a recent order requiring a former White House teleprompter operator to return $107,539 in profits and pay a $65,000 civil penalty for trading contracts tied to US President Donald Trump’s speeches.