CME Group CEO Terry Duffy Clashes With CFTC Chair Over Prediction Markets
CME Group CEO Terry Duffy advised the Commodity Futures Trading Commission (CFTC) it clears contracts that merchants can rig. Chairman Michael Selig minimize him off and known as the declare faux information.
The trade occurred Thursday in Washington, on the first assembly of the CFTC’s Innovation Advisory Committee. Duffy runs the most important futures trade on the planet. Selig regulates it.
2,500 Filings and Zero Objections
Selig constructed the 35-member committee in February. Its roster consists of the chief executives of Kalshi, Polymarket and DraftKings. Thursday’s agenda coated crypto, synthetic intelligence and occasion contracts.
Duffy used his flip to assault the final one.
Roughly 2,500 self-certifications have landed on the company since January 2025, he mentioned. None had been opposed.
Self-certification is the quick lane. An trade recordsdata a contract, attests that it follows the legislation, and lists it. Nobody has to approve it.
Duffy mentioned a few of these filings break core precept 3. That rule bars any contract that merchants can readily manipulate.
There is a structural motive few filings get challenged. Selig is the one sitting commissioner on the CFTC. Four of the company’s 5 seats are empty.
“We’re not a bunch of carnival barkers at a circus. We are working probably the most envious markets on the planet within the United States of America.”
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Selig Calls It Fake News, But The Record Is Messier
Duffy raised two circumstances.
In the primary, a Fort Bragg soldier named Gannon Van Dyke turned $33,034 into $409,881 on Polymarket. He guess on whether or not US forces would enter Venezuela. He additionally held labeled particulars of the raid that captured Nicolás Maduro. Prosecutors charged him in April.
In the second, Trump’s teleprompter operator Gabriel Perez cleared greater than $100,000 on Kalshi. He traded on what the president would say. Investigators discovered bets on greater than a dozen speeches.
Selig minimize in earlier than Duffy completed.
“…these merchandise aren’t listed within the United States. They by no means had been. This occurred offshore, and that’s faux information.”
Duffy known as {that a} cute remark. He granted that the Maduro market was Polymarket’s, which trades offshore.
The teleprompter case is completely different. Those trades ran on Kalshi, an trade the CFTC itself designates and oversees. Kalshi’s personal surveillance workforce flagged the exercise and reported it to the company.
So one instance landed offshore. The different didn’t.
Kalshi Trades Compute Today. CME Waits for October.
Duffy then moved to timing, and the grievance obtained sharper.
Kalshi already runs markets on the price of renting Nvidia chips. It launched them in July.
CME needs in on the identical commerce. On August 11 it mentioned it might checklist rental futures for Nvidia H100 and B200 chips. Its accomplice is Silicon Data, a agency backed by buying and selling home DRW. Target date, October 5, pending overview.
Then the company opened a session. On August 19 it requested the general public to comment on compute derivatives for 60 days.
Count the times. A 60-day window ranging from Federal Register publication closes after October 5.
DRW founder Don Wilson, additionally on the committee, requested why compute wanted 60 days in any respect.
Duffy added a second element. Cantor Fitzgerald had opened institutional buying and selling in Kalshi contracts hours earlier. “Let’s name {that a} coincidence,” he mentioned.
Cantor’s announcement coated occasion contracts broadly and by no means talked about compute.
The Man Attacking Self-Certification Once Used It
Duffy’s frustration will not be summary. His personal filings maintain stalling.
In July the company froze CME’s 24-hour crude oil contract whereas a rulemaking ran. Selig known as the timing wholly inappropriate. That remark interval closes on August 26.
CME has already gone to court docket. On June 18 it sued the CFTC over Kalshi’s Bitcoin perpetual contract, arguing the company rubberstamped Kalshi’s reasoning. Those perps cleared $1 billion in quantity of their first week.
Duffy additionally pressed on offshore venues. Traders within the US can not legally contact them, he mentioned, but they get there anyway. He requested what the fee is doing to “police all people’s VPN.”
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He named Hyperliquid. President Donald Trump had floated bringing Hyperliquid onshore at a White House crypto summit the day past.
One level cuts towards Duffy. CME self-certified its personal Bitcoin futures in December 2017, utilizing the identical quick lane he now calls harmful. Duffy signed the announcement.
He closed on 2008. Bad conduct in finance doesn’t value the business one step, he mentioned. It prices 20, and the rebuild takes years.
Duffy fingers the CEO job to Lynne Fitzpatrick in March 2027. The committee he was addressing can not write guidelines. Selig can, alone, and two of his clocks run out inside weeks.
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