Better Markets Calls for CFTC Ban on Exchange Self-Trading
Better Markets has called on the Commodity Futures Trading Commission (CFTC) to ban exchanges from trading on their own platforms, citing concerns over conflicts of interest. The group argues that the CFTC's plan to permit affiliated market makers could be challenging to enforce fairly. Better Markets also expressed worries about the risks associated with clearinghouses and questioned the CFTC's broader approach to regulating retail crypto trading.
The push comes amid ongoing challenges from crypto and prediction markets, which are disrupting traditional financial market separations. Amanda Fischer of Better Markets highlighted that these business combinations could create problems that cannot be resolved with internal rules alone. She pointed to FTX's 2022 proposal to operate under a vertically integrated model as a notable example of this trend.
Vertical integration occurs when a company controls multiple parts of the same market, such as an exchange running a marketplace while also trading on it. Fischer noted that six exchanges already engage in proprietary trading on their own platforms, likely including prediction markets. The CFTC aims to distinguish between proprietary trading and market making, but Better Markets believes this line will be difficult to enforce.
The group argues that if an exchange requires its own affiliated market maker due to insufficient liquidity, it raises questions about whether the contract should be listed at all. Better Markets also expressed concerns about exchanges enforcing rules fairly when they have a business interest in one of their members. Additionally, the group questioned the risks of clearinghouses receiving capital from affiliates, which could increase the likelihood of financial problems spreading through the market.
The issue arises as the CFTC works on a wider regulatory framework for crypto. On October 5, 2026, the agency opened public comments on a potential framework for leveraged retail crypto trading. CFTC Chairman Michael Selig emphasized the need for regulations that provide clarity, certainty, and consumer protections. However, Better Markets remains critical of the CFTC's approach, with Benjamin Schiffrin arguing that the agency lacks the investor protection mandate needed for retail crypto customers.