Michael Selig, the nominee to lead the Commodity Futures Trading Commission, voiced unease on Wednesday regarding the current state of trading in "event mention contracts," describing the activity as "concerning." His remarks, made during a television appearance, follow a regulatory warning issued to several supervised entities the previous day over the potential for market manipulation in these instruments.

Selig, who has been nominated by President Trump to chair the CFTC, elaborated that a significant portion of these contracts presents problems, prompting the regulator to evaluate them under stringent criteria. These contracts allow traders to speculate on the content of speeches, television appearances, or earnings calls involving specific individuals.

Addressing growing concerns about possible wash-trading practices on the Kalshi platform concerning perpetual futures, Selig affirmed that the federal regulator will not tolerate such activity, which involves deceptive self-trading to inflate volume. Media reports have indicated that the CFTC has already launched an investigation into transactions related to that platform.

The chairman also touched on a proposal from Kalshi seeking permission to offer margin-based leveraged trading to its users. Selig noted that while the CFTC is currently reviewing this submission, approval would not guarantee broad access. Even if granted, participation in leveraged trading would be restricted to traders who meet rigorous qualification standards.

These developments highlight the regulator's focus on both the integrity of event-based markets and the potential risks associated with introducing leverage to retail trading platforms.