Lawmakers Grill CFTC Chair on Prediction Markets, Hyperliquid

On Thursday in Washington, the House Agriculture Committee, which oversees the Commodity Futures Trading Commission, questioned CFTC Chair Mike Selig. Lawmakers from both parties raised concerns about prediction markets, event contracts that pay on political or violent events, and offshore crypto platforms that offer perpetual futures.

Members focused on a string of unusual trades. Committee members pointed to roughly $500 million placed on oil positions about 15 minutes before a March 23 social media post by President Donald Trump, after which oil prices dropped sharply. Lawmakers asked whether people close to the administration had advance knowledge. Selig declined to speculate, telling lawmakers, “I’m not going to play speculation games with you,” and added the agency will pursue insider trading where it finds evidence.

Several Democrats criticized markets that allow wagers tied to war or the deaths of political leaders. Representative Jim Costa called those contracts profiting from tragedy, declaring, “I don’t believe this is market innovation.” Selig noted the CFTC’s broad statutory definitions and told the committee he is preparing a proposed rulemaking on prediction markets that will be open for public comment. The hearing also included discussion of a class-action lawsuit against Kalshi over payouts tied to a market about Iran’s leader.

Lawmakers tested how to distinguish event contracts from traditional gambling. In an exchange using an unlabeled example tied to a baseball game, Selig did not distinguish a sports wager from an event contract on the same outcome. Representative Gabe Vasquez observed, “It’s clear to me you can’t tell [the difference], because the average consumer also can’t tell.”

Republicans pressed Selig about Hyperliquid, a decentralized exchange that offers perpetual futures and operates offshore. Representative Austin Scott warned that large volumes on Hyperliquid’s oil contracts could affect U.S. markets and consumers. Selig acknowledged the platform’s popularity and indicated the CFTC is examining how to ensure venues that move significant volume meet standards similar to regulated U.S. futures exchanges.

Lawmakers also questioned whether expanding retail access to perpetual futures is appropriate given those products’ leverage and lack of expiration. Selig has advocated broader access to perpetuals for retail traders and told the committee more clarity will come through rulemaking and enforcement actions.

Members asked the CFTC to clarify the legal status of event contracts, explain how it will police offshore and crypto-native venues, and outline steps to protect consumers and markets. The committee did not set a timeline for further action.