Emails Draw Scrutiny as CFTC Chair Vote for Quintenz Stalls
A series of emails involving Commodity Futures Trading Commission (CFTC) chair nominee Brian Quintenz and his expected Chief of Staff, Kevin Webb, has raised concerns among Senate staffers and cryptocurrency analysts, including about Quintenz's status as a board member and shareholder in Kalshi. The content of the emails has reportedly contributed to delays in a Senate Agriculture Committee vote on Quintenz's nomination.
The messages, first disclosed in The Closing Line newsletter, were obtained through a Freedom of Information Act (FOIA) request and circulated among congressional offices.
Webb requested a private briefing for Quintenz with the CFTC's General Counsel, covering sensitive matters such as administrative leave cases, open application lists, and ARRP submissions, which refer to agency restructuring and reduction plans.
Another redacted email discussed PredictIt's political market activities and the CFTC's process for approving its expansion. The scope of the FOIA request implies the sender was Quintenz. PredictIt recently re-entered the US market under a new agreement with the CFTC finalized on July 15.
These disclosures have heightened concerns over Quintenz's current role as a board member and shareholder in Kalshi. Although Quintenz pledged to resign from the board and divest his shares if confirmed as chair, he has not yet done so.
Senator Cory Booker raised potential conflict-of-interest issues during a June hearing, referencing Kalshi's hiring of Donald Trump, Jr., and Quintenz's ongoing ties to one of the best prediction markets. The Senate committee's scheduled vote on Quintenz, initially delayed once before due to a logistical issue, was removed from the agenda just two hours before its start time, reportedly at the request of the White House.
Quintenz defends market-based approach to event contracts
During a hearing in June, Quintenz addressed several questions from the Senate Agriculture Committee concerning his previous tenure at the CFTC and his views on prediction markets. The session covered the scope of the Commission's oversight powers, particularly regarding contracts based on event outcomes.
Quintenz reiterated that event-based futures contracts should be recognized under the Commodity Exchange Act if they have economic or financial significance. He previously voiced this view in 2021 while dissenting from a Commission decision involving ErisX, which had proposed a sports-related contract.
He told the committee that such products provide valuable tools for risk management and market insight, adding that the Act supports contracts enabling "price discovery and price dissemination."
Kalshi's growth highlights market implications
Kalshi's expansion has sharpened its focus on the conflict-of-interest questions surrounding Quintenz. The company recently closed a $185 million Series C funding round led by Paradigm, boosting its valuation to $2 billion. Other investors included Sequoia Capital, Multicoin Capital, and Peng Zhao of Citadel Securities.
The funding round puts Kalshi in direct competition with prediction market rival Polymarket, which recently secured $200 million. Kalshi plans to use the capital to develop its technology stack and further integrate with retail trade platforms.
Additionally, the company announced a partnership with Elon Musk's xAI. This will bring the latter's Grok AI-based chatbot to the platform.
