Comment Text:
Dear Chairman and Commissioners,
My name is Alfred Zhu, and I'm a trader and investor based in Massachusetts. I'm writing to express my strong support for well-regulated prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). As someone who actively trades on platforms like Kalshi and Polymarket, Ive seen firsthand the value these markets provide, and I believe the CFTC should craft rules that protect participants while allowing these innovative tools to thrive.
Prediction markets are not just a niche hobby for me; theyre a source of unique information that I cant get from polls or pundits. Ive used them to gauge election outcomes, economic indicators, and even weather events that impact my investments. The prices reflect a collective wisdom thats often more accurate than traditional forecasts, and that benefits everyone, not just traders like me. Whats more, allowing regular people to participate democratizes access to this information. If only big institutions could trade, the insights would stay locked away. I believe opening these markets to everyday folks like me makes the data richer and fairer.
I also want to address a concern I know the CFTC has about informed trading, especially related to insider information (as raised in Questions 29-32). I get why this is a worry, but I think informed trading often improves price discovery. When someone with deep knowledge trades, it helps the market reflect reality faster, which benefits all participants. Of course, illegal insider trading is a problem, but its already against the law. Federal employees and others with nonpublic information are barred from misusing it, and the CFTC has tools to enforce that. Shutting down or over-restricting prediction markets to stop a few bad actors feels like punishing the majority of honest traders. Its like closing the stock market because of insider trading scandals. Instead, focus on enforcing existing laws and targeting specific abuses.
Im also passionate about my freedom to participate in legal, regulated markets. Trading on prediction markets isnt gambling; it takes research and judgment, just like trading stocks or commodities. Ive spent hours analyzing data to make informed bets on events that affect my financial planning, like interest rate decisions. Platforms like Kalshi, operating under CFTC oversight, provide a safe space for this. Banning or overly restricting these markets would push activity to unregulated offshore sites, which is far riskier for everyone.
In closing, I urge the CFTC to support proportionate regulation of prediction markets. Address specific risks with targeted rules, especially around manipulation and insider trading (as discussed in Topic Areas A and E), but dont ban or stifle these valuable tools. Theyre a net positive for informed decision-making and financial freedom.
Sincerely,
Alfred Zhu
