Commodity Futures Trading Commission (CFTC) Chair Michael Selig has raised concerns about the potential for FTX-style collapses in unregulated prediction markets. Selig highlighted the rapid growth of platforms like Kalshi and Polymarket, which handle over $20 billion in trades monthly, as a significant risk if these markets remain offshore and unregulated. He emphasized the need for U.S. oversight to protect investors and ensure market stability. The popularity of prediction markets, which now cover a wide range of events beyond political betting, has attracted regulatory scrutiny. California Governor Gavin Newsom has issued an executive order to prevent public officials from exploiting inside information for profit. Meanwhile, major financial institutions like JPMorgan are exploring entry into this space, underscoring the need for clear regulations to safeguard participants and maintain market integrity.