SEC Enforcement Director: We are closely monitoring earnings contracts on prediction markets.

According to PolyBeats monitoring, on October 29, Bloomberg exclusively reported that David Woodcock, Director of the SEC's Division of Enforcement, said in an interview with Bloomberg that the SEC is closely watching contracts tied to corporate earnings and performance metrics on prediction markets and other exchanges, which could trigger insider trading and market manipulation investigations.

Prediction markets had previously been primarily regulated by the U.S. Commodity Futures Trading Commission (CFTC), with Kalshi and Polymarket's U.S. operations under its jurisdiction, and the CFTC treats event contracts as swaps. However, under the Dodd-Frank Act, swaps tied to a single security are "security-based swaps" and fall under SEC regulation. Contracts tied to a single company's earnings happen to fall at the intersection of the two agencies' jurisdictions.

In terms of trading volume, earnings-related markets are currently small in scale. As of October 30, the total trading volume of earnings markets actively trading on Polymarket was approximately $112.1k, averaging about $1.1k per market.