CFTC Commissioner Christy Romero delivered her farewell remarks at the Brookings Institution on Tuesday. Romero was confirmed in 2022, filling one of the Democratic commissioner positions.
She concluded her remarks by voicing her hope that as the Trump administration loosened restrictions on derivatives markets that certain guardrails would remain in place:
“As the current Administration pursues a deregulatory agenda in the name of growth, care should be taken not to remove the load-bearing resilience built into markets—resilience that has resulted in financial stability and protected our economy.”
Romero went on to argue for regulation’s role in supporting market growth:
“Regulators should not have to sacrifice growth for financial stability. These are not mutually exclusive goals. Regulators should promote both…Growth requires a regulatory environment where markets are financially stable and resilient during times of volatility, uncertainty, and stress.”
As Romero made her final remarks, Trump’s nominee to chair the CFTC made an important disclosure.
Quintenz pledges to divest from Kalshi
Brian Quintenz, Trump’s CFTC chairman nominee, released his plan to prevent conflicts of interest regarding Kalshi if confirmed as chairman. He was a Kalshi board member before his nomination. In a letter to John Einstman, the Designated Agency Ethics Official at Office of the General Counsel, Quintenz wrote:
“Upon confirmation, I will resign from my position with KalsbiEx. I hold stock and unvested stock options, which vest on a monthly basis, with KalshiEx…I will forfeit all KalshiEx stock options that are unvested at the time of my resignation. I will divest any vested stock options and stock in KalshiEx as soon as practicable, but not later than 90 days after my confirmation. If I divest the stock options by exercising them, I will divest the resulting stock was soon as practicable but not later than 90 days after my confirmation.”
Quintenz also addressed his resignation from other organizations, including Remember Those in Prison, the Crypto Council for Innovation, AH Capital Management, and Next Level Derivatives.
His divestment pledge also included an assurance that he would “carry out the divestitures within the timeframe described” in his letter. It’s an important step in making the transition from the private to public sector.
CFTC’s new support for sports and election contracts
Quintenz may eliminate his most pressing conflicts of interest, but one of his most anticipated prediction market policies may be his acceptance of sports contracts. He already defended one exchange’s right to offer event contracts on sports, arguing that all events are commodities that can be traded on a DCM.
The CFTC has already taken action favorable to Kalshi’s expansion into new event contracts. Under Acting Chairman Caroline Pham, the CFTC has worked with Kalshi to dismiss the company’s lawsuit over its regulator’s prohibition of election contracts under the Biden administration.
Quintenz’s confirmation could mark the next phase of prediction market expansion. Rather than yes or no questions, Kalshi could begin offering conditional markets or markets that offer hard details about the impacts of different economic policies. Sports may be a focal point, but prediction markets could expand far beyond “yes” or “no” under Quintenz’s leadership.
