Comment Text:
With all due respect, I am deeply disappointed by the CFTCs actions as regards Kalshi and PredictIt over these last few months. It is quite obvious that political prediction 'contracts', in the amounts these platforms are allowing them, have no financial hedging function. Neither has it been established that one would even want people to be able to 'hedge' against the results of the democratic political process. In the case of PredictIt, however, the combination of the exchange platform with a vibrant comments section frequently provided a welcome antidote to the manipulation of news coverage and information that is otherwise so rampant in society. PredictIt provided an ecosystem that was designed as a hedge against propaganda - namely, by providing a place for people to exchange news and ideas around the relevant issue or 'contract', the value of which could be immediately assessed by reviewing changes in the underlying price of the related trade. In shutting down PredictIt, the CFTC has moved to destroy this ecosystem.
As well, the CFTCs current review seems peculiar given that it has had a regulatory framework in place for these specific types of contracts for over a decade now. It is imperative that the CFTC explain what Congressional or Judicial modifications have occurred that would necessitate it's revisiting of the issues around political event contracts. Kalshi's proposal errs in suggesting that any entity which is not a registered exchange is somehow 'unregulated'. To the contrary, regulation through the use of no-action letters can be just as effective as any other form of regulation and often has the advantage, as in this case, of allowing a regulatory body to assert power and control over an area of activity that it has no obvious legal right to act upon. The CFTC would also do well to acknowledge the role played by former CFTC officials in its current actions vis-a-vis Kalshi and PredictIt. The appearance of impropriety has been raised frequently in a number of outside forums and should be either explained or admitted to by the Commission. Thank you.
