The Commodity Futures Trading Commission headquarters in Washington, Aug. 20, 2026.
Daniel Heuer | Bloomberg | Getty Images
The CFTC has advised regulated entities that prediction markets’ “mentions” contracts carry a heightened risk of manipulation, because settlement hinges on discrete conduct that may not be independently verifiable or externally confirmed.
In a press release accompanying the agency’s letter to designated contract market entities, the CFTC explained that such contracts are more susceptible to exploitation “because their settlement turns on the discrete conduct of a person that may be neither independently generated nor externally verifiable.”
The letter clarifies that the agency is not imposing new obligations on exchanges. Instead, it offers guidance on how “mention” markets may be listed under the Commodity Exchange Act, the law governing CFTC‑regulated assets.
Mention markets allow traders to bet on specific words that will appear in a speech, earnings call, or broadcast. These contracts have drawn regulatory scrutiny. CNBC reported in August that the CFTC was reviewing the contract type, prompting platform Kalshi to withdraw its sports‑related mention markets. In July, headlines also emerged after a former teleprompter operator for President Donald Trump profited from Kalshi trades linked to the president’s statements. Gabriel Perez settled with the CFTC in August and paid a $172,539 fine for insider trading on a prediction market.
To mitigate manipulation, the CFTC advises exchanges listing mention markets to evaluate four key factors: the subject’s external obligations, potential external pressures that could influence the subject’s speech or actions, the independent verifiability of the settlement words, and the adequacy of oversight mechanisms to detect manipulation.
The agency also encourages exchanges to consult its Division of Market Oversight early in the design phase of mention market contracts to discuss risk‑mitigation strategies.
Disclosure: CNBC and Kalshi have a commercial relationship that includes customer acquisition and a minority investment.
