CFTC Warns Exchanges of Manipulation Risk in Political Speech Bets
A Sept. 22 advisory requires contract-specific safeguards for markets tied to what a person says, does or attends.
The CFTC issued a warning Tuesday about manipulation risks in prediction contracts based on an individual’s speech, actions or attendance.
The agency’s Division of Market Oversight said these markets should be listed only in limited circumstances. Exchanges must provide a complete, contract-specific analysis showing that each contract is not readily susceptible to manipulation under the Commodity Exchange Act and CFTC regulations.
The concern is that settlement may depend on one person’s conduct rather than an independently produced or externally verifiable benchmark. People who can influence the outcome or obtain information before the public may also gain an advantage.
The advisory followed a CFTC order involving Gabriel Perez, a former White House teleprompter operator. The agency said Perez traded presidential mention-market contracts from December 2025 through February 2026 after accessing speeches before delivery. He was ordered to disgorge $107,539.02, pay a $65,000 civil penalty and accept a three-year trading ban.
Kalshi says it screens political figures and other potentially conflicted traders, monitors patterns continuously, freezes flagged accounts and reports confirmed violations to the CFTC. The advisory does not impose an outright ban but raises the evidence and surveillance requirements for exchanges seeking to list mention markets.
