The Commodity Futures Trading Commission has issued a warning stating that speculative wagers on prediction markets that hinge on whether a person will say specific words or who will be present at an assembly present an “elevated danger of manipulation.”
Within a fresh advisory published on Tuesday by the Division of Market Oversight at the CFTC, agency personnel indicated that there are only “restricted conditions” under which these financial contracts can be offered without violating the Commodity Exchange Act and regulations set by the agency.
“This notice aims to caution designated contract markets that Mention Market contracts could harbor an elevated vulnerability to being manipulated,” officials stated.
Throughout the preceding year, anxieties regarding insider trading have escalated as prediction markets experienced massive growth in interest, reaching multi-billion-dollar valuations. The CFTC has initiated legal actions against multiple individuals, such as an ex-White House teleprompter operator whom the commission accused of leveraging prior knowledge of presidential addresses to secure profits via “mention markets” on Kalshi. In a separate matter, the CFTC penalized former Representative George Santos, alleging that he made public declarations a fortnight prior to a State of the Union speech concerning his attendance, which substantially shifted the valuation of the related event contract up or down.
As elements of the new guidance, personnel suggested that designated contract markets ought to evaluate “whether the specific person whose verbal statements or actions determine the settlement result is bound by distinct legal, occupational, agreement-based, fiduciary, secrecy, or institutional duties that effectively discourage behavior intended to influence the final outcome,” and urged exchanges offering mention markets to implement aggressive trading regulations and safeguards to prevent manipulation attempts.
The CFTC has likewise maintained a prominent supervisory stance regarding prediction markets overall, despite resistance from individual states which contend that sports wagering specifically falls under local authority and that such contracts breach regional gambling statutes. The question of who ultimately oversees sports wagering conducted through prediction instruments is currently being litigated in the courts.
Originally published at https://www.theblock.co/news/regulation/2026-09-22-cftc-advisory-mention-markets-manipulation-risk-416120.
