CFTC puts prediction markets at centre of first advisory meeting

Chairman Michael S. Selig has released the agenda for the first meeting of the Commodity Futures Trading Commission’s Innovation Advisory Committee, and prediction markets sit near the heart of it. The inaugural session is set for Aug. 20, runs from 1 p.m. to 4 p.m. Eastern, and will devote one of three substantive panels to prediction markets and event contracts.

According to the agenda, the prediction-markets panel is titled 'Prediction Markets: Innovation, Jurisdiction, and the Future of Event Contracts'. It will examine the growth of event contracts as tools for price discovery, information aggregation and risk management, along with the technologies and market structures expanding access to prediction markets.

The same session is also scheduled to take up the respective roles of federal and state authorities, recent state litigation and enforcement actions, and the importance of regulatory certainty and clearly defined jurisdiction. Other listed topics include product design principles for event contracts, expectations for exchanges listing innovative products, market surveillance, manipulation concerns and customer protections.

The meeting’s first two panels point to the committee’s broader remit. Session I, 'Crypto’s Regulatory Evolution: From Uncertainty to Clarity', will look at the history of crypto asset markets, state licensing regimes, the resulting patchwork of requirements and the absence of a comprehensive federal market-structure framework. Session II, 'Artificial Intelligence: Preparing for Intelligent Markets', will cover AI in derivatives markets, including trading, compliance, surveillance and risk management, as well as agentic finance, the overlap between crypto and AI, and whether additional guidance or best practices would support responsible innovation.

The commission said the meeting will be streamed live on CFTC.gov. Members of the public may submit comments through Aug. 27, and all comments will be posted on Regulations.gov; the agency also said the agenda may change to accommodate other committee priorities.

The Innovation Advisory Committee was launched in January, when the CFTC renamed the former Technology Advisory Committee and said it would advise the commission on the impact and implications of technological innovation in financial services, derivatives and commodity markets. The committee’s website says it may make recommendations on technological change in financial markets and the wider U.S. economy.

Opening remarks are scheduled from Michael Passalacqua, the designated federal officer, Walt Lukken, the chair, and Selig. Selig has said he wants to meet with entrepreneurs, thinkers and builders to discuss how emerging technologies and financial products are shaping markets, and he is scheduled to close the meeting at 3:55 p.m.

The commission’s enforcement division issued a Feb. 25 advisory describing two cases involving misuse of nonpublic information and fraud in KalshiEX event contracts. As covered earlier this week, the CFTC also warned that filings tied to prediction-market incentive programmes are often incomplete or unclear.