Democrats Urge Federal Warning Against Insider Betting on Prediction Markets

More than 40 Democrats from the U.S. Senate and House of Representatives have urged federal regulators to warn government employees about the illegality of insider trading on prediction markets. The request was led by Senator Elizabeth Warren of the Senate Banking Committee and Senator Cory Booker of the Senate Agriculture Committee.

The lawmakers sent a letter to Commodity Futures Trading Commission (CFTC) Chairman Mike Selig and officials at the U.S. Office of Government Ethics, asking them to circulate executive-wide guidance reminding federal employees that trading with non-public information is prohibited. The letter, dated March 29, stressed that bets placed on platforms such as Polymarket and Kalshi qualify as regulated derivatives.

Suspicious Contracts Raise Insider Trading Concerns

The appeal followed reports of unusual trading tied to contracts involving military actions in Venezuela and Iran, the length of a speech by President Donald Trump’s press secretary, and the firing of former Homeland Security Secretary Kristi Noem. Lawmakers emphasized that U.S. derivatives laws prohibit officials from using confidential government information for financial gain.

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This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.