Comment Text:
Dear Chairman and Commissioners,
My name is Nathan Gruenwald, and I'm a trader and investor from the United States. I've been actively trading on prediction markets like Kalshi and Polymarket for a while now, and Im writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I strongly support well-regulated prediction markets and believe the CFTC should focus on proportionate rules rather than broad restrictions or bans.
Ive seen firsthand how valuable prediction markets can be. They consistently produce forecasts that are more accurate than polls or pundits. As a trader, I rely on this information to make better decisions, and I know the public, media, and even policymakers benefit from the clarity these markets provide. Its not just about trading for profit; its about accessing unique insights you cant get anywhere else. Beyond that, these markets let me hedge real risks. For example, Ive used them to offset potential losses tied to economic policy changes or election outcomes that could impact my investments. This isnt gambling; its a practical tool, much like trading stocks or commodities.
Im also concerned about consumer protection, which is why I believe regulated markets like Kalshi are the way to go. Theyre safer than unregulated offshore platforms. If the CFTC over-restricts or bans these markets, activity will just move to less safe venues where theres no oversight. Thats worse for everyone. The U.S. should be leading in financial innovation, not ceding ground to other countries. We have a chance to set the standard here, and I hope the CFTC sees that.
Addressing some of your specific questions, like those in Topic Area B on public interest (Questions 7-14), I think prediction markets clearly serve the public by improving price discovery and risk management. On Topic Area E (Questions 29-32) regarding inside information, I believe informed trading actually helps price discovery and benefits all participants, as long as its not based on illegal insider knowledge. The CFTC already has robust tools to prevent manipulation and insider trading in other derivatives markets. Use those tools here instead of broad bans. Banning entire categories to stop a few bad actors punishes honest traders like me and pushes activity offshore.
I urge the CFTC to adopt targeted, proportionate regulations that address specific risks without stifling innovation or restricting our freedom to participate in legal, regulated markets. Lets keep prediction markets accessible and safe under U.S. oversight. Thank you for considering my perspective.
Sincerely,
Nathan Gruenwald
