U.S. CFTC Issues First-Ever Predictive Market Manipulation Risk Guidance and Seeks Public Comment on Proposed Rules

Gate News Report, March 13 — According to Bloomberg, the U.S. Commodity Futures Trading Commission (CFTC) has issued its first guidance on the risks of manipulation in prediction markets, requiring exchanges to consult with regulators before launching markets that may be vulnerable to manipulation and insider trading. The CFTC stated that exchanges can continue to introduce new markets through self-certification processes but must assess whether certain event contracts pose higher risks of manipulation or price distortion and communicate with staff during the initial design phase. The agency also released a pre-notice of proposed rules seeking public feedback on how to amend existing prediction market regulations. The CFTC chair said this move aims to develop new rules based on a reasonable interpretation of the Commodity Exchange Act, while assuring the public that the CFTC will exercise exclusive jurisdiction over prediction markets. The guidance specifically notes that if event contracts are found to be against public interest, the CFTC may block contracts related to assassination, war, or terrorism, though the document does not explicitly state these markets will be completely banned. Additionally, the new guidance indicates that sports contracts can continue, but exchanges should collaborate with sports leagues to monitor potential insider trading.