The Commodity Futures Trading Commission's first Innovation Advisory Committee meeting convened on Thursday to discuss the latest in prediction markets regulation, including growing concerns on "mention markets" found on the platforms.
The CFTC's Chairman Michael Selig, who is the only official on the federal agency's typically five-member commission board, said the committee's role would be to provide input on CFTC's decisions which would strengthen regulations on markets.
Consisting of over 30 members, the committee includes top brass from Robinhood, Nasdaq and CME. The group first discussed the regulation landscape on crypto and artificial intelligence, but the most impassioned discussions revolved around prediction markets.
Polymarket's CEO and founder, Shayne Coplan and Kalshi's co-founder Luana Lopes Lara, were also present at the roughly three-hour-long meeting.
Key concerns that came up at Thursday's meeting include self-certification for event contracts, as well as "mention markets" — contracts where traders speculate on certain words being used in a speech or an earnings call — and their susceptibility to manipulation. Committee members also discussed a regulatory roadmap for prediction markets.
At Thursday's meeting, Terry Duffy, the chair and CEO of CME Group, took one of the most aggressive stances on how prediction markets should operate.
In compliance with the Commodity Exchange Act, prediction market platforms can propose, file and certify event contracts without the CFTC's prior approval. This is known as self-certification. Duffy noted this method, which allows platforms to speed up the process of posting new event contracts, can make markets vulnerable to manipulation.
"There's been 2,500 self-certifications since this administration was taking office in January of 2025, of which none have been opposed," Duffy said. "There's been a lot of self-certifications around products that are in violation of core principles."
After Duffy raised his concerns on market manipulation, Lopes Lara asked him if CME has ever had issues with insider trading.
"If you'd like to have a debate, I'm happy to have a debate with you," he responded.
Lopes Lara stated her support of self-certification, noting that it's beneficial for timely events. "We need to be able to have these markets fast for our users," she said.
Duffy also highlighted recent instances of insider trading on prediction markets. This includes the April arrest of a U.S. soldier following bets on the capture of Venezuelan leader Nicolás Maduro and a teleprompter operator facing federal investigation in connection with bets related to statements made by President Trump.
CME's Duffy also brought up insider cases related to Kalshi's so-called mention markets, which Robinhood's co-founder and CEO Vlad Tenev shared concerns on too.
Mention markets usually ask what a public figure will say during a speech, event or earnings call.
Tenev did not ask for an outright ban on mention markets but said the federal agency should look at them closely.