- Duffy raised concerns that some prediction-market contracts could be manipulated and questioned why Kalshi could offer products that CME could not yet list.
- Lopes Lara challenged CME over its own history with market manipulation, leading to a pointed exchange over regulatory resources, efficiency and market credibility.
- The confrontation occurred amid a broader federal-state dispute over prediction-market jurisdiction and planned CFTC changes concerning event contracts and consumer protection.
CME Group Chairman Terry Duffy and Kalshi co-founder Luana Lopes Lara clashed over prediction-market regulation during a Commodity Futures Trading Commission meeting on Thursday, highlighting a growing divide between traditional exchanges and newer event-contract platforms.
Duffy argued that some prediction markets are vulnerable to manipulation and questioned the types of contracts being offered, including markets linked to political developments and other events. He also questioned why Kalshi could offer a compute-related prediction market while similar contracts proposed by CME remained under regulatory review.
Lopes Lara challenged Duffy after Kalshi was criticised, asking whether CME had ever experienced market-manipulation problems during its history. The exchange executive responded by pointing to the size of CME’s regulatory department, prompting Lopes Lara to suggest that the company should learn more about efficiency. Duffy then countered by questioning Kalshi’s understanding of credible markets before the moderator intervened.
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Regulators Face Growing Pressure
The confrontation came as regulators and state authorities continue to dispute who should oversee prediction markets, particularly contracts involving sports, elections and other real-world events.
CFTC Chairman Michael Selig has maintained that the agency has exclusive authority over prediction markets, while the commission is also pursuing disputes with states seeking to apply gambling laws.
Selig said the CFTC expects to propose further amendments covering the listing of event contracts and consumer protections. The agency has also proposed restrictions on certain contracts involving war, assassination and some sports proposition bets considered particularly vulnerable to manipulation.
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