The U.S. Commodity Futures Trading Commission (CFTC) Market Surveillance Division has issued an official compliance guidance warning that mention-type event contracts in prediction markets—those based on whether a particular person will “mention a specific piece of vocabulary” or “attend a certain event”—carry an extremely high risk of market manipulation and insider trading. The CFTC stated that such contracts may be listed only in “very limited circumstances”; otherwise, doing so would violate the Commodity Exchange Act (CEA) and related regulations. The guidance requires platforms, when assessing such underlying assets, to examine whether the decision-maker has legal, binding confidentiality, fiduciary, or organizational compliance obligations that would effectively curb behavior intended to deliberately influence settlement through carefully timed statements. It also requires platforms to establish upfront trading risk controls and anti-manipulation mechanisms. Previously, the CFTC has filed charges and indictments in multiple cases involving alleged insider trading, including one involving a former White House prompt-creator operator who allegedly profited on Kalshi by exploiting the privilege of having advance knowledge of the President’s prepared remarks. (TheBlock)