CFTC Member Kristin Johnson Criticizes Prediction Markets and Deregulation in Farewell Speech

Kristin Johnson, representing the Democratic Party in the U.S. Commodity Futures Trading Commission (CFTC), in her farewell speech criticized the approval of prediction markets and the course towards deregulation of the financial industry.

Johnson announced her departure from the agency at the end of August 2025 amid cutbacks. She had held the position since 2022, when she was appointed by President Joe Biden.

On September 3, speaking at the Brookings Institution, the former official stated that the regulator shows insufficient caution when dealing with new instruments:

“I am disappointed that during my tenure we were unable to advance a comprehensive rule on political contracts. The activity of recent months only confirms my concerns and those of other experts regarding prediction markets.”

The situation escalated after the CFTC lost a court case to the prediction market Kalshi, which was granted the right to offer contracts on political events. Against this backdrop, Polymarket’s activities were also approved in the U.S.

According to Johnson, the Commission has too few “safeguards,” and the understanding of how such platforms operate remains limited. She expressed concerns that in the future, platforms might start offering credit products to retail clients and also drew attention to the practice of companies reselling licenses:

“Sometimes companies obtain permissions for traditional products but quickly change direction and start self-certifying contracts in the prediction market. In other cases, licenses are simply resold.”

Touching on the issue of the crypto market, Johnson emphasized that the deregulation policy of the Trump administration could have long-term consequences:

“In this area, caution is needed, as current measures form the foundation of the economy for future generations.”

Concluding her speech, she reminded colleagues of three principles that regulators should follow:

“Do not lie. Do not cheat. Do not steal.”