The US commodities regulator’s chief enforcement director sent a caution to prediction market insider traders Tuesday, saying violators will face enforcement action.
“We are aware of the speculation about insider trading,” CFTC enforcement director David Miller said at a panel at New York University. “We are watching.”
“There’s a myth in mainstream media and social media that insider trading doesn’t apply in the prediction markets … That is wrong.”
Miller, a former federal prosecutor appointed to the post on March 2, said the Commission will exercise prosecutorial discretion and won’t devote resources to “trivial” cases. “We will only be prosecuting cases against those who tip or trade with misappropriated information,” he said.
Prediction market insider trading has drawn lawmakers’ attention recently, threatening the credibility of an industry that reportedly exceeded $20 billion in monthly volume, according to TRM Labs.
Event contracts are “swaps,” not gaming
Miller emphasized the agency’s view that event contracts are swaps, not gaming, and that insider trading laws apply. He said the CFTC will concentrate on core enforcement areas including market abuse and violations of anti–money laundering laws.
Concerns escalated after several well-timed trades ahead of major announcements by US President Donald Trump. Another notable case involved an anonymous trader who wagered on the capture of Venezuelan leader Nicolás Maduro and reportedly won over $400,000. More recently, suspicious activity related to the invasion of Iran and the reported death of Ayatollah Khamenei raised national security alarms.
New legislation proposed as prediction platforms self-regulate
Facing public pressure, leading prediction platforms Kalshi and Polymarket have introduced new insider trading rules. In late March, lawmakers unveiled the bipartisan Public Integrity in Financial Prediction Markets Act of 2026 to curb insider trading by government officials. That same week, the Preventing Real-time Exploitation and Deceptive Insider Congressional Trading Act (PREDICT Act) was also introduced.
Democratic lawmakers have pressed the CFTC to warn federal employees not to use inside knowledge to trade in prediction markets.
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