At least 42 Democratic lawmakers have asked the U.S. Commodity Futures Trading Commission and the Office of Government Ethics to warn federal employees not to use nonpublic information to trade on prediction markets.
The letter, sent to CFTC Chair Mike Selig and the OGE, says “multiple incidents” have raised concerns and “speculation about possible insider trading in prediction markets by federal employees.” The lawmakers requested executive branch–wide guidance stating that federal employees must refrain from insider trading in these markets.
Prediction markets let users buy and sell contracts tied to the outcomes of future events and have faced growing scrutiny over alleged insider trading and possible gambling-law violations. Major platforms such as Kalshi and Polymarket have said they will add guardrails to try to prevent misuse.
The lawmakers flagged specific incidents, including wagers on the capture of Venezuelan leader Nicolás Maduro and bets on the length of White House press secretary Karoline Leavitt’s Jan. 7 speech. They also noted reports of suspicious trades related to a potential invasion of Iran, the death of Ayatollah Khamenei, and whether former DHS Secretary Kristi Noem would be fired, saying some trades have prompted national security concerns about signaling impending actions.
The group has asked for a briefing and answers by April 13, including whether the CFTC has investigated or received reports of federal employees engaging in insider trading on prediction markets and what steps the agency is taking to detect and prevent such activity.
The letter cites the STOCK Act, signed in 2012, which bars government officials from using material, nonpublic information for personal gain. The lawmakers contend that because the CFTC has classified event contracts as regulated derivatives, those contracts fall under the STOCK Act’s prohibitions. “Thus, the CEA’s prohibition on government officials engaging in insider trading also applies to such activity in prediction markets,” the letter states.
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