The Commodity Futures Trading Commission (CFTC) is warning prediction markets that some event contracts, such as sports contracts “based on the actions of a single individual or small group,” may be susceptible to manipulation.
The CFTC’s Division of Market Oversight (DMO) put out an “advisory” on prediction markets Thursday, which it said existed to remind exchanges “of their regulatory obligations pursuant to the Commodity Exchange Act and Commission regulations.”
Alongside the advisory, the CFTC published an “Advanced Notice of Proposed Rulemaking” for prediction markets, including more than 150 questions about different rules that prediction markets face.
In the advisory, the DMO noted that exchanges have to abide by 23 core principles, including one that says they may list “only contracts that are not readily susceptible to manipulation.”
