Democrats urge warnings to federal officials against insider bets on prediction markets
Democrats requested the CFTC and ethics officials warn federal employees against illegal insider trading in prediction markets like Polymarket and Kalshi.Summary
Over 40 Democrats in the U.S. Senate and House of Representatives have sent a letter to the Commodity Futures Trading Commission (CFTC) and the U.S. Office of Government Ethics (OGE) requesting guidance to federal employees regarding insider trading in prediction markets. The request stems from concerns about suspicious betting activity on prediction market firms like Polymarket and Kalshi, suggesting potential insider knowledge of government or military actions. Lawmakers, including Senator Elizabeth Warren and Representative Maxine Waters, argue that these contracts qualify as regulated derivatives under CFTC rules, making insider trading illegal. The letter specifically cites examples of potentially illicit bets on events like military actions in Venezuela and Iran, and personnel changes within the Department of Homeland Security. Federal prosecutors are also reportedly investigating potential insider trading cases related to these markets. This action is connected to ongoing legislative efforts, such as the Digital Asset Market Clarity Act, and broader scrutiny of the crypto industry.
(Source：CoinDesk)