Duffy Cites 2,500 Unopposed Self-Certifications, Selig Calls It Fake News

The CFTC convened its Innovation Advisory Committee for the first time and the prediction markets session turned into an argument between the chairman of the largest US derivatives exchange and the regulator. The number Terry Duffy brought was 2,500, and nobody disputed it.

• The Commodity Futures Trading Commission held the inaugural meeting of its Innovation Advisory Committee on 20 August, chaired by Walt Lukken, with a closing session devoted to prediction markets and event contracts
• CME Group chairman and outgoing chief executive Terry Duffy said there had been "2,500 self-certifications since this administration has taken office in January of 2025, of which none have been opposed"
• Duffy argued that some sports-related contracts are "individual-based" and "susceptible to manipulation", citing trading on the political future of Venezuela's Nicolás Maduro and wagers placed by a teleprompter operator on what President Trump would say during speeches
• CFTC chairman Michael Selig disputed the relevance of both examples, saying the products concerned "are not listed in the United States" and calling the characterisation "fake news"
• Duffy also traded arguments with Kalshi co-founder Luana Lopes Lara, in a session that also covered federal and state jurisdiction, market manipulation and customer protection

The Regulator's Own Panel Became the Venue for the Argument

The Innovation Advisory Committee met for the first time on 20 August, chaired by Walt Lukken and convened under CFTC chairman Michael Selig. Its agenda ran in three parts: moving crypto regulation from uncertainty to clarity, the use of artificial intelligence in trading, compliance and risk, and finally, for the last fifty minutes, prediction markets and event contracts. Executives from Ripple, Coinbase, Uniswap and CME Group took part.

The final session did not go to script. Terry Duffy, chairman and outgoing chief executive of CME Group, used it to attack the mechanism by which prediction market contracts reach the market at all. Under self-certification, a designated contract market may list a product by filing with the CFTC and certifying that it complies with the Commodity Exchange Act. The regulator can object. Duffy's point was arithmetic: there have been "2,500 self-certifications since this administration has taken office in January of 2025, of which none have been opposed".

He went on to argue that a subset of sports contracts are what he called "individual-based", turning on the conduct of one identifiable person, and are therefore open to manipulation in a way an index or a commodity is not. He offered two illustrations. One was trading tied to the political future of Venezuela's Nicolás Maduro. The other was bets placed by an operator of President Trump's teleprompter on what the president would say during speeches. He also raised insider trading concerns about the "mention markets" that ask what a named public figure will say at a given event.

Selig rejected the framing directly, saying the products Duffy described "are not listed in the United States" and calling the characterisation "fake news". Duffy also exchanged arguments with Kalshi co-founder Luana Lopes Lara during the session.

The disagreement was not about whether Washington needs clearer rules. On that, the room broadly agreed. It was about whether some of the products already trading should exist.

Self-Certification Is the Whole Argument, and Duffy Named It

Strip away the Maduro and teleprompter anecdotes and the substantive claim is procedural, which is why it is the dangerous one. Self-certification is designed for a market of institutional participants listing instruments whose economics regulators already understand. It puts the compliance judgment on the exchange and gives the CFTC a veto it must actively exercise. A record of 2,500 filings and zero objections can be read two ways: as a regulator satisfied that the filings comply, or as a veto that exists on paper. Duffy is inviting the second reading, and Selig's response addressed the examples rather than the count. Whatever one thinks of CME's motives, an unopposed run of that length is the strongest argument available to every state attorney general currently arguing that nobody has scrutinised these contracts.

The Teleprompter Example Is Not About Venezuela

Selig's rebuttal, that the cited products are not listed in the United States, is narrowly accurate and beside the point Duffy was making. The teleprompter case is not an argument about a particular contract. It is an argument about a structural feature of mention markets: when the outcome depends on words a specific person will speak, the set of people who can move the market includes everyone with advance access to the script. That is insider information in the ordinary sense, held by people who are not registered, not surveilled and not obviously covered by anything. Answering it by observing that the example traded offshore leaves the design question untouched, and the design is being replicated by venues that are listed in the United States.

An Incumbent Asking for Rules Is Never a Neutral Witness

None of this makes CME a disinterested party. It is the largest US derivatives exchange, it is a designated contract market operating under the full weight of the rules it wants applied to others, and it has watched prediction market venues reach enormous volumes in categories it does not serve. Asking for tighter listing scrutiny is competitive strategy as well as prudential argument, and Duffy's outgoing status makes it a legacy position rather than one he has to execute. That does not make him wrong. It does mean the useful test is whether anyone without a commercial stake makes the same argument. They do. The NFL told the CFTC in July that its draft rules fell significantly short, and asked for outright bans on micro-bets, player props and award markets as categories it considers open to manipulation by a single participant. Several state courts have arrived at the same place from a different direction, most recently in Washington, where the order carves out precisely the individual-outcome categories Duffy was describing.

The CFTC built this committee to demonstrate that innovation and oversight can share a table. On the evidence of its first meeting, the table works. What it produced was not consensus but a number the regulator has not yet answered.