CLARITY's Real Odds, the CFTC's One-Man Show, and the Spotify Scheme Rocking Prediction Markets

**Summer Mersinger** (0:00)
I get so many people that say to me, clarity is only at like 40% on Polly Markets or 40% on Cal-She, you know, and I'm saying, vote-wise, I'm like 99% sure we're gonna have a vote. Obviously, a lot of crazy stuff could happen and set that back, but I feel very strongly that we're gonna have a vote. As far as passage, I've been at about 60%.
Some of that's just got instinct from years of, you know, working in the Senate, being around legislative process, seeing what's happening.

**SPEAKER_3** (0:37)
Introducing Realfi, a smarter stablecoin that's backed by real world assets. Launching August 2026, join the waitlist at realfi.co. Ledn just launched its lowest loan rates ever. The larger the loan, the lower the rate. Plus your Bitcoin stays protected, never lent out for interest. With auto top-ups, LTV alerts and more, you're always in control. Learn more at ledn.io. JPEG Trading is a global proprietary trading firm operating across cryptocurrency and DeFi markets, specializing in providing liquidity. Follow JPEG Trading on X for more.

**Rebecca Rettig** (1:11)
Welcome to The Policy Protocol, your weekly espresso shot of the latest in crypto loan policy. Not just what happened, but what actually matters. I'm Rebecca, and I'm here with my co-host, Renato Mariotti. How are you, Renato?

**Renato Mariotti** (1:23)
I'm doing well. Been a great week.

**Rebecca Rettig** (1:26)
Yeah. You had a big steak dinner for your birthday, is that right?

**Renato Mariotti** (1:29)
I did. Bavettes are definitely worth visiting if you're in Chicago.

**Rebecca Rettig** (1:34)
No, that's on my list for sure.
For this week, we're going to of course talk about our hot topics. They're diverse as always, as between the two of us. We have an amazing guest, Summer Mersinger, who is CEO of the Blockchain Association. We have lots of things to talk about with her, including some better market spaciness with her old co-commissioner and Clarity. Then we have, I think, super fun people of the week, very different and off the beaten path, but still in the policy world. Renato, get us kicked off. What is your hot topic of the week?

**Renato Mariotti** (2:08)
My hot topic of the week is market manipulation on prediction markets, which is not necessarily a new topic, but it's really evolved. We saw this week, for example, there was a paper about spot Bitcoin being manipulated in order to get a payout on five-minute spot Bitcoin prediction markets. But the real story from my vantage point is an article that came out talking about market manipulation related to music streaming.
If you can believe it, Spotify literally had to deal with a song earnings by Malcolm Todd experiencing a sudden massive surge in plays where literally, it was, I think, a 1 in 77 octillion chance. They calculated that this was organic, but 500,000 artificial streams were losing the numbers in order to get a payout on a prediction market. I really think, Rebecca, this is just a start of a trend. I think we're going to start seeing more and more other non-market activity that ends up being impacted by prediction markets. So it's something I'll be watching and I suspect the CFTC is going to be watching as well.

**Rebecca Rettig** (3:23)
I'll say two things. For sure, the CFTC will and I'll get more into that in a second. But are the artificial streamers an AI product? Is that something that you think like a bunch of agents or something has spun up? We're now having this big convergence of AI and markets, but leading to more market manipulation?

**Renato Mariotti** (3:40)
Well, that's so smart. I agree. We talked last week a little bit about agentic trading, which is something that I'm very interested in. I really think that watching how and thinking about how AI impacts trading is going to be interesting. So you'll have AI agents placing trades, recommending trades, but now you may have AI agents actually helping people engage in fraud.

**Rebecca Rettig** (4:03)
Well, that's something to be seen. I think we'll have to think, I'm as a former litigator and I know you're a litigator, I'll be very interested to see how that plays out in the courts from a mens rea center mental state requirement. But a little bit more on your hot topic for a second, which is the guidance that we got from the CFTC was all about, and some of the rulemaking was all about making sure that markets were not readily susceptible to manipulation, especially when you're looking at them spinning up self-certifying. How do we even know at this point where this seems so attenuated, what actually is readily susceptible to manipulation anymore?