CFTC Chairman Michael Selig says the agency is monitoring prediction markets for possible manipulation ahead of the 2026 U.S. midterms. Kalshi and Polymarket held $250 million in combined midterm open interest as of Oct. 18, while past CFTC settlements show how the agency has handled trading abuses.
CFTC Chairman Michael Selig said the agency is watching prediction markets for signs of manipulation ahead of the 2026 U.S. midterm elections. The remarks come from Bloomberg's Oct. 23 interview with Selig, as described in an accessible summary of its reporting. That summary does not identify a new election-related enforcement case.
Prediction markets hold $250 million in midterm positions
Dune's Oct. 20 research put combined midterm open interest on Kalshi and Polymarket at $250 million as of Oct. 18. Kalshi accounted for $210 million and Polymarket for $40 million, which puts Kalshi's share at 84%.
The two platforms also recorded $59 million in combined notional trading during the seven days through Oct. 18. However, the snapshot describes activity through that date and does not establish that large positions resulted from manipulation.
CFTC orders show penalties and trading bans
Past enforcement shows what the agency has already acted on. In an Aug. 28 settlement, the CFTC ordered former White House teleprompter operator Gabriel Perez to return $107,539.02 in trading profits and pay a $65,000 civil penalty. The regulator found that Perez used advance access to presidential speeches to trade contracts based on words the president would say.
Perez also received a three-year trading ban. The CFTC also credited KalshiEX with assisting the investigation.
A separate July 31 settlement involved former Rep. George Santos, who traded on whether he would attend the 2026 State of the Union address. The agency found that he made material misrepresentations and omissions on social media about his attendance plans. He was ordered to return $17,569.98 in profits, pay a $17,500 civil penalty and accept a three-year trading ban.
Staff advisory targets contracts tied to personal conduct
On Sept. 22, CFTC staff issued an advisory on contracts tied to a named person's words, attendance, appearances or interactions. Staff said settlement based on personal conduct can create heightened manipulation risks.
Husch Blackwell attorneys wrote in an Oct. 2 analysis that the advisory neither banned mention contracts outright nor created new legal obligations. They described heightened scrutiny for exchanges listing those products.
Source: crypto.news
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