Comment Text:
I am writing to demand that the Commission take decisive and immediate regulatory action on event contract derivatives traded through prediction markets. The current expansion of these markets poses a direct threat to market integrity, invites insider trading, and dangerously normalizes the commodification of events that should never be subject to financial speculation.
Event contracts tied to military operations, foreign policy decisions, terrorism, political violence, or other government actions create profound and unacceptable risks. Individuals with access to nonpublic or privileged information in these areas are uniquely positioned to exploit it for financial gain. This is not a theoretical concern—it is an inherent structural vulnerability. Worse, the mere perception that government decisions could be influenced, anticipated, or profited from by private actors undermines public trust in democratic institutions.
The Commission must act clearly and unequivocally. Event contracts involving acts of war, terrorism, political assassinations, or non-financial government decisions should be explicitly prohibited as contrary to the public interest. These are not legitimate financial instruments—they are invitations to manipulation, corruption, and moral hazard.
Beyond these categories, any event contract in which the outcome can be known in advance or controlled by a limited group must be presumed unfit for approval. This includes contracts tied to award outcomes, scripted events, corporate announcements, or political actions where insiders possess definitive prior knowledge. Markets cannot function fairly when some participants are guaranteed informational advantages.
Under the Commodity Exchange Act, the Commission has both the authority and the obligation to draw firm boundaries where market activity conflicts with the public good. That responsibility cannot be deferred. I urge the Commission to prohibit these high-risk categories outright, implement stronger surveillance and enforcement mechanisms to detect and deter insider trading, and place the protection of market integrity and public trust above the unchecked expansion of speculative products.
Not everything should be financialized. War, governance, and human life are not commodities. The Commission’s response to this issue will make clear whether it intends to uphold the public interest—or allow it to be traded.
