Kalshi's exponential growth would have been impossible without regulatory approval from the Commodity Futures Trading Commission, which cleared the way for the prediction market's event contracts.

Few are more responsible for securing the commission's green light than Jeff Bandman, a six-time Jeopardy! champion who spent years in leadership roles at the CFTC. He left in 2017, launched a consultancy, and was working as a sort of CFTC-whisperer when he took a meeting with Kalshi co-founders Tarek Mansour and Luana Lopes Lara. The two needed help getting their idea for a federally-regulated "everything exchange" off the ground, and say they were spurned by some 65 lawyers before calling Bandman. He was the first to bite.

At their initial meeting, Bandman explained the CFTC's inner workings and what approval for their idea would take. He workshopped their approval application and joined the nascent start-up in January 2019 as its head of regulatory strategy.

When Lara and Mansour first visited the CFTC's Washington, D.C. headquarters that September, Bandman was there, too.

Seven years and billions of dollars in event contract trading later, Bandman is returning to the firm after a two-year hiatus to run Kalshi Prime, the business that will spearhead Kalshi's push into yet another new financial product: perpetual futures.

Unlike traditional futures contracts, perpetual futures -- often called "perps" -- have no fixed expiration date. The contracts are basically bets between two traders on whether the price of an underlying asset will go up or down. One trader is long and the other short; every few hours the losing trader pays the other. Traders can also apply leverage to their positions. Since perps trade 24/7, a highly-leveraged trader risks exposure to price swings that could see their entire position automatically liquidated at any hour.

The most popular perps are tied to cryptocurrency prices, though some platforms, including the international version of Polymarket, offer perpetual futures on stocks. Other offshore platforms offer leverage as high as 50-to-1.

Polymarket has a data partnership with Dow Jones, the publisher of Barron's.

In the U.S., perps are bought through CFTC-regulated futures commission merchants, or FCMs, the futures market equivalent of a broker-dealer in the equities market. Kalshi Prime is Kalshi's FCM.

"Jeff believed in Kalshi when most people thought it could never be regulated," Mansour, Kalshi's CEO, said in a press release. "He helped us turn that idea into a CFTC-designated exchange. There is no one better to lead the FCM that will power Kalshi's next chapter."

Bandman is a bit of a CFTC nerd and, considering his status as a Jeopardy! champion, this reporter felt compelled to request some trivia. Bandman obliged: "Before becoming an independent agency in 1975, the CFTC was previously part of this segment of the U.S. government." (What is the Department of Agriculture?)

After the 2024 U.S. presidential election, Bandman says he called Mansour to suggest Kalshi make a push into perpetual futures. The CFTC has been supportive of the products, approving them in May.

But perps have their share of critics.

When the CFTC requested public comment on perpetual futures in April, 2025, consumer-advocacy nonprofit Better Markets wrote that perps' "round-the-clock trading model, synthetic pricing mechanisms, and infinite duration are more reminiscent of speculative gaming than structured risk management. Retail investors lured by the promise of 24/7 trading and high leverage may unknowingly assume excessive risk, often with little understanding of how these contracts function or how losses can rapidly compound."

Bandman says that detractors of perpetual futures conflate offshore platforms and U.S. platforms.

"In a CFTC-regulated market, you have a proper market surveillance program," he says in an interview with Barron's. "All the market participants are onboarded and [have their identity confirmed]. You know who all the people are, so you're not just trading against North Korea or market manipulators."

He sees echoes of the critiques of event contracts, where potential for manipulation in prediction markets has been a source of consternation for legislators. Bandman recently shared news of his return to Kalshi with a friend who then brought up concerns around insider trading and identity verification.

"I'm like, 'Dude, you're talking about offshore Polymarket!'" Bandman replied.

"It's like a family where there's two siblings. And one of them, they work hard and do their homework. And then there's the younger sibling that just goes and does whatever they want and is constantly getting in trouble, and whenever they do something the older sibling gets blamed for it," he says. "I see that happening constantly in the Kalshi-Poly dynamic."

In a statement, a Polymarket spokesperson said the company "surveils and monitors for insider trading and other illegal activity, consistent with other markets. The transparency of the blockchain provides the public with a real-time view of all trading activity, which allows us to efficiently identify and trace potential wrongdoers, as well as allowing the general public to flag suspicious trading activity."

As for Kalshi, "They have spent so much time and resources pushing hit pieces on [CEO Shayne Coplan] and Polymarket to the detriment of both companies and the industry at large."

Another difference Bandman cites is how offshore platforms set the available leverage.

"No major regulator is going to allow 100-to-one leverage on these things," he says. "I don't think 100-to-one leverage is calculated based on safety."

The CFTC itself doesn't set a hard limit on the leverage regulated perp platforms can offer.

"Under CFTC oversight, leverage ratios are set pursuant to a platform's risk management framework," the agency wrote in a consumer education one-sheet issued when it approved perpetual futures in May.

Barron's asked if Kalshi has set a limit on the amount of leverage it will offer. Bandman says consumer safety factors into how the platform determines available leverage, adding that there is a "judgment call." The primary way leverage limits are calculated is through historical modeling of volatility in the underlying asset, which Bandman says he has experience with from his time leading the CFTC's division of clearing and risk.

Kalshi is developing perps for gold, silver, and platinum -- all assets with lots of trading history to look at.

"And we have a vision for introducing this perps model to other products as well," Bandman says. "In setting your risk management framework, you look at the history including not just how things behave on sunny days but also how they behave on stormy days."

The number of FCMs has dwindled in recent decades amid consolidation in the financial sector. In 2015, a CFTC commissioner called FCMs "an endangered species." At the end of 2004 there were 190 FCMs, according to CFTC records. Today there are 73.

With Kalshi Prime, Kalshi is hoping to disrupt yet another industry.

"Something we're looking into is to give people more flexibility about the types of collateral they can use," Bandman says. He brought up corporate bonds, stablecoins, and money-market-funds as examples.

That is all subject to regulatory approval, he adds, but "we want to find ways to innovate, not just in our products, but in our services and to revisit how this regulated infrastructure, the FCM, can find new ways to help customers in the derivatives industry."