CME’s Duffy clashes with CFTC and Kalshi over prediction markets

The confrontation that broke out on Thursday at a CFTC-led meeting could be seen as more than a play for regulation. Prediction markets like Kalshi and Polymarket increasingly tap into crypto settlement systems, while the regulator involved in the conflict is deciding which approach to take for regulating event contracts and perpetual futures in the US.

The stakes are quite high as the size of the prediction market ballooned to $63.5 billion in 2025, compared to $16.5 billion in 2024. Whether Washington will implement regulation at the federal level for the prediction market or leave it to the states to regulate it independently may determine whether liquidity is smoothly consolidated or fragmented. CME Group’s CEO Terrence Duffy noted on Thursday that the existing regulatory system can also be exploited by dishonest actors.

Duffy calls out self-certified contracts

At the CFTC’s Innovation Advisory Committee meeting, Duffy criticized the number of event contracts that exchanges have self-certified rather than submitted for review. He pointed to contracts involving what President Donald Trump might say in his State of the Union address and when Venezuelan President Nicolás Maduro might be removed from power.

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