US regulator says it has power to police prediction market misconduct
By Chris Prentice
NEW YORK, Feb 25 (Reuters) - U.S. Commodity Futures Trading Commission (CFTC) on Wednesday said it has the power to police illegal trading practices in predictions markets, following a statement from a top firm that it had flagged two insider trading cases to the agency.
The CFTC said it has the "full authority" to police such misconduct in event market contracts, citing a statement from Kalshi that the firm had flagged and frozen traders' accounts related to two incidents of insider trading.
Concerns over insider trading in these nascent, but growing markets have been mounting, with a top Justice Department official this month flagging them as an area ripe for enforcement. State gaming regulators have also sought to police such markets, which compete with casinos and traditional betting firms.
The CFTC in a court filing last week said it has exclusive jurisdiction over such markets, ratcheting up its battle against the states.
Companies that are registered with the CFTC, such as Kalshi, are typically responsible for helping to police misconduct in their markets and reporting it to the agency.
Neither the CFTC nor Kalshi responded immediately to request for additional comment.
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