Robinhood and CME find common ground against mention markets

Terry Duffy waited hours for his moment, then spent it on a hot dog.

Not literally — but the CME Group CEO's performance at the CFTC's inaugural Innovation Advisory Committee meeting on Thursday followed the same pattern as his earlier contracting complaints: maximum provocation, minimum resolution. Duffy came to Washington with a list of contracts he believes violate CFTC Core Principle 3, which bars Designated Contract Markets from listing products susceptible to manipulation. He named three. A market on Venezuelan President Nicolás Maduro's removal. Several sports contracts. And the trades placed by Gabriel Perez, a former teleprompter operator for Donald Trump who allegedly generated more than $100,000 betting on what the president would say before the president said it.

The Perez trades are the sharpest edge in the room and everyone in it knows why. Kalshi's own surveillance team flagged the irregularities and alerted the CFTC. That is the system working. What Duffy was pressing on is whether the system was designed to catch this at all, or whether it caught it by accident.

CFTC Chair Michael Selig interjected that the objectionable contracts were "not listed" in the US — meaning offshore. He was right about the Maduro trade. He was wrong about Perez, who placed the trades on Kalshi, a federally regulated platform operating under Selig's own jurisdiction. That misstatement, in a room containing thirty executives whose livelihoods depend on that distinction, was not a small thing.

Selig's prepared remarks were otherwise coherent. He framed the current fight in historical terms — the same assault that plagued the Chicago Board of Trade in its early years — and outlined a three-part roadmap: amendments to Rule 40.11 clarifying contracts involving gaming, war, and assassination; modernized reporting requirements for fully collateralized contracts; and new consumer protection standards for designated contract markets. He is building a federal fortress, brick by brick, against twenty-plus ongoing state lawsuits.

Kalshi's Luana Lopes Lara defended self-certification on speed grounds. Prediction markets need to respond to events fast, she said. She also noted she has never heard a single argument for why state-by-state regulation produces better consumer protection than a federal framework. That argument is structurally correct and politically incomplete. The states suing Kalshi are not making a consumer protection argument at their core — they are making a revenue argument, and everyone in the room understands the difference.

The sharpest exchange came when Lopes Lara asked Duffy whether CME had faced manipulation problems. Duffy replied that he employs more people in his regulatory department than Kalshi has in its entire company. Lopes Lara told him he might learn something about efficiency. The room understood that neither of them was wrong.

Robinhood's Vlad Tenev aligned with Duffy on mention markets — urging close scrutiny without calling for a ban. Two of the largest institutional players in the space agreeing on a problem, while disagreeing about the remedy, is the closest thing to consensus this meeting produced.