The Commodity Futures Trading Commission issued new guidance for prediction markets, asking exchanges to engage with regulators before opening certain markets that might be vulnerable to manipulation and insider trading.
The document released on Thursday offers one of the first official responses from federal regulators to several of the controversies that have swirled around prediction markets as they have exploded in popularity over the past year.
More established exchanges have recently complained that prediction markets have taken advantage of a longstanding regulatory process that allows them to create new financial contracts without explicit regulatory signoff.
Read More: