A new advisory tells exchanges that contracts on what a named person says or does must clear a higher bar, after the agency settled cases with a White House teleprompter operator and George Santos. Staff at the Commodity Futures Trading Commission issued an advisory on Sept. 22 warning prediction market exchanges that contracts settling on what a named person says or does may be viewed as “presumptively readily susceptible to manipulation,” and that any exchange seeking to list one should expect to make a “heightened showing” to regulators. The staff letter , signed by Duncan Hennes, acting director of the agency’s Division of Market Oversight , covers what the industry calls mention markets : bets on whether someone will use a given word, show up at an event, or interact with another person, such as by shaking hands or posing for a photo. Most event contracts on registered exchanges settle on outcomes no single person controls, like economic data releases, elections or sports results. “Mention Markets are different,” staff wrote. The letter’s own example is a live-streamed podcast. If a contract pays out on whether the host says a particular catchphrase, “the host can easily fulfill this condition, and a trader may directly induce the outcome by submitting a question or purchasing an on-air acknowledgment.” People near the speaker often see scripts, prepared remarks or guest lists ahead of time, which the letter treats as material nonpublic information . Staff also singled out low-stakes words, citing “an unrelated buzzword recited during an earnings call” as the kind of utterance few people scrutinize. The advisory is not a ban. Staff wrote in the letter that “in limited circumstances,” a well-designed contract backed by exchange trading rules, surveillance and controls could rebut the presumption. Exchanges should weigh whether the person controlling the outcome faces legal, professional or fiduciary duties that discourage gaming it, whether outsiders could pressure that person, and whether the outcome can be independently verified and draws substantial public scrutiny. Staff also urged exchanges to “identify potential controllers and known insiders” and, for a bet on a public official’s attendance, to consider position limits sized so manipulation “would be economically irrational relative to its cost.” The letter “does not create new obligations,” staff wrote, and it represents staff views that do not necessarily reflect those of the Commission. The guidance follows two CFTC settlements tied to these contracts. In August, the agency settled charges against Gabriel Perez , a former White House teleprompter operator who traded presidential mention markets using advance access to speeches, making more than $107,500 in profits. He was ordered to pay $172,000, including a $65,000 penalty discounted for cooperation, and banned from trading for three years. In July, the CFTC ordered former Rep. George Santos to pay $35,000 after finding he traded a contract on his own 2026 State of the Union attendance while making what the agency called “material misrepresentations” about his plans on social media. Related Listen: CME vs. Kalshi. Is Washington Picking a Winner in Prediction Markets? AI-assisted content: This article was produced with the assistance of AI tools and was reviewed, edited, and fact-checked by a member of the Unchained editorial team before publication. Get the hottest takes from Laura, her guests, and The Chopping Block crew on all the news in crypto! Get daily news and insights — straight to your inbox