Comment Text:
Dear Chairman and Commissioners,
My name is Viktor Seredynskyi, and Im a lawyer based in New York. Im writing to express my support for the proportionate regulation of prediction markets as outlined in the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). While Im relatively new to these markets, I believe they offer significant value to individuals and society, and Im concerned that overly restrictive rules could stifle a promising financial tool.
As a legal professional, I value the freedom to participate in legal, regulated markets. Prediction markets arent just a niche interest; they provide unique insights through aggregated information that often outpaces traditional polls or expert opinions. This isnt gambling in my view. It requires research, analysis, and judgment, much like any other investment activity Ive studied or advised on. I think its critical that ordinary citizens like myself have access to these markets. Limiting participation to large institutions would concentrate valuable information among a few, which seems unfair and counterproductive to creating accurate market prices.
I also see real potential for hedging everyday risks. For instance, a small business owner might use these markets to offset uncertainties tied to election outcomes or regulatory shifts. As someone who often works with clients navigating complex financial landscapes, I believe this kind of tool could be a game-changer if properly regulated.
Regarding specific concerns raised in the ANPR, Id like to address Questions 29-32 on insider trading and informed trading. I understand the worry about misuse of nonpublic information, but I firmly believe the CFTC already has robust tools to tackle this. Insider trading is illegal, and federal employees are barred from trading on privileged information. The CFTCs existing authority to combat market manipulation in other derivatives markets can and should be applied here. Banning or severely restricting prediction markets to prevent a small number of bad actors would punish law-abiding participants and push activity to unregulated, offshore platforms where oversight is minimal. Thats a worse outcome for everyone.
I also want to touch on Questions 7-14 about balancing innovation and consumer protection. The US has a chance to lead in financial innovation with prediction markets. Over-regulating or categorically banning certain contracts risks ceding that leadership to other jurisdictions. A targeted approach, using the enforcement tools already at your disposal, would better serve the public interest.
In closing, I urge the CFTC to support the growth of prediction markets through balanced, proportionate regulation. Dont let the fear of misuse overshadow the benefits these markets can provide. Adapt your existing safeguards to address specific risks rather than imposing broad restrictions. Thank you for considering my perspective.
Sincerely,
Viktor Seredynskyi
