CFTC enforcement director David Miller said the agency would investigate and, where appropriate, prosecute insider trading on prediction markets. He said exchanges have obligations to maintain surveillance and compliance controls and to list contracts that are not susceptible to manipulation.
Miller’s remarks set out the CFTC’s stated enforcement priorities and expectations for regulated exchanges.
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US lawmakers from both parties questioned the head of a federal regulator about prediction markets at a hearing, as state and federal scrutiny grew. Polymarket halted a market on the timing of a US airman’s rescue after Rep. Seth Moulton objected, saying it did not meet the platform’s integrity standards. The White House also warned staff against trading on such markets with private information.
The report says US regulators, including the Commodity Futures Trading Commission, have signalled a tougher approach to insider trading in prediction markets. Kalshi’s leadership said insider trading is prohibited on its platform and cited monitoring systems; the report also describes proposed legislation to restrict participation by government officials and others with sensitive information.
Senator Elizabeth Warren and 41 other lawmakers asked the CFTC and the US Office of Government Ethics to issue guidance on federal employees trading on prediction markets. Their 29 March letter seeks a staff briefing and responses by 13 April, and says existing law bars the use of non-public information for personal gain in such trades.
US prosecutors and the CFTC are investigating prediction-market trades involving military events and corporate earnings, citing The Wall Street Journal. One investigation concerns a servicemember suspected of earning over $1m on Polymarket. Charges in two cases could follow this fall, but authorities have not made final charging decisions.
Robinhood limits the event contracts available to US users to reduce risks from market abuse, the company said. Its president in the UK singled out contracts on exact words spoken in public or corporate settings, while the company partners with Kalshi and ForecastEx. Robinhood is also pursuing a legal dispute with Massachusetts over the state’s attempt to restrict its event contracts.