A CFTC roundtable in Washington, D.C., devolved into a public sparring match Thursday as industry heavyweights traded barbs over the future—and integrity—of prediction markets. The confrontation pitted CME Group Chairman Terry Duffy, whose exchange is the world’s largest futures venue by volume, against Kalshi co-founder Luana Lopes Lara during a Commodity Futures Trading Commission panel that gathered executives from traditional finance, crypto, and prediction platforms to debate how event contracts should be regulated. “You’re a lot concerned,” Duffy said at one point, stressing his view that some prediction contracts are particularly vulnerable to manipulation. “We’re not a bunch of carnival barkers at a circus. We are running the most envious markets in the world in the United States of America.” He singled out the kinds of event bets Kalshi lists—including, sarcastically, a Nathan’s hot-dog–eating contest—and questioned why Kalshi could already offer a compute-prediction market while CME’s own proposed compute contracts remain under review. Lara pushed back directly after Kalshi was named. “I would actually have to ask Terry: Has CME ever had any issues with any market manipulation, any issues ever in its history?” she said. The exchange escalated quickly: Duffy touted CME’s regulatory resources (“I have more people in my regulatory department than you have in your whole company”), Lara jabbed at efficiency, and Duffy shot back about “credible markets,” until moderator Walt Lukken cut in. Lara sought to reframe the debate: nascent markets always carry risks, she argued, and those risks are not unique to prediction platforms. “Every market has risk and every nascent market will have risks as well,” she said. “The point of having regulation is that you find these issues, you address these issues, and there’s a way to address them in a correct way.” DraftKings CEO Jason Robins later urged civility, asking participants to stop taking “shots at each other’s business models,” saying such attacks don’t move the policy discussion forward. Why this matters for crypto and DeFi Prediction markets let users buy and sell $1-settling event contracts whose prices imply the probability of an outcome. For example, on Myriad—a prediction market run by Dastan, Decrypt’s parent—contracts tied to “Bitcoin highs in August” can show the market’s perceived odds that BTC will hit a certain price within a month. Platforms like Kalshi and Polymarket operate at the center of a legal tug-of-war over whether those contracts are federally regulated derivatives or state-governed gambling products. Regulatory backdrop and recent rulings CFTC Chair Rostin Behnam (referred to as “Selig” in some reporting—note: Behnam is the current CFTC chair) has defended the agency’s jurisdiction over federally regulated prediction markets and warned state challengers that the agency will litigate. The CFTC is also taking legal action against states that have tried to apply gambling laws to event contracts. In June, the CFTC proposed new restrictions on certain contract types it views as highly manipulation-prone—such as bets tied to war, assassination, and some sports proposition wagers. Earlier this month, nine Democratic senators urged the CFTC to ban wildfire-based contracts, citing fears they could create perverse incentives for arson, insider trading, or disaster profiteering. Kalshi’s recent legal troubles illustrate the stakes. A Washington state judge last week ordered Kalshi to stop offering contracts tied to sports, elections, politics, and other events in that state, concluding the company likely violated state gambling and consumer-protection laws. Two days earlier the CFTC had stepped in with an order to keep Kalshi trading as part of a separate dispute over New York’s attempts to block its contracts. The clash in D.C. underscores how prediction markets—now intertwined with crypto-native tools and user bases—are forcing regulators, exchanges, and startups to debate where responsibility, oversight, and innovation should sit. The outcome will shape not only event contracts but broader questions about how digital markets and traditional finance coexist under U.S. law. Read more AI-generated news on: undefined/news