On Monday, Commodity Futures Trading Commission (CFTC) Acting Chairman Caroline Pham announced a “series of public roundtables” on a range of issues, including prediction markets. The full list of issues includes “affiliated entities and conflicts of interest, prediction markets, and digital assets.”
The roundtables are among Pham’s first acts in setting CFTC policy. They are also ideas she had well before she knew she would lead the CFTC.
In an August 2024 press release, Pham called for these same roundtables. She noted, “The CFTC has successfully held many similar roundtables for decades as a best practice to address changes in the derivatives markets.” Pham issued her August 2024 press release in response to Kalshi getting its own clearinghouse certified by the CFTC, a regulatory move that removed an expensive middleman for Kalshi.
“Over the next several months, the CFTC will engage with industry leaders, market participants, other market structure experts, and public interest groups through open and transparent public roundtables to provide the CFTC with the best information and latest data. Details about the series will be provided as they become available,” Pham said.
Avoiding overregulation in the Trump era
Since becoming a CFTC commissioner in 2022, Pham has raised concerns about the CFTC’s approach to regulation. Her May 2024 press release listed examples of court cases that the CFTC lost, which sometimes included admonishments from judges.
For example, Pham characterized summary judgment as a case “incorrect as a matter of law.” Kalshi’s District Court victory that launched its 2024 election contracts came from a summary judgment.
The roundtables seem to be Pham’s attempt to avoid the missteps she perceived in the CFTC during her first two years as a commissioner. Throughout that time, her support for prediction market innovations came from procedural issues she had with the CFTC, like improperly applied rules and rushed decision-making.
The end of Pham’s Jan. 28 press release summarizes the vision she hopes to implement as she begins her tenure as chairman of the regulatory agency.
“Adopting a holistic approach to evolving market trends, rather than relying on ad hoc enforcement or registration orders, will help to establish clear rules of the road that promote responsible innovation and strengthen American competitiveness on a global stage.”
