Overview
- Seven U.S. House members sent CFTC Chair Michael S. Selig a letter questioning the agency’s inaction on suspected insider trading in prediction markets, where people buy and sell contracts on real‑world outcomes, and requested answers to six questions by April 15.
- The letter cited event contracts tied to possible U.S. military actions in Iran and Venezuela and said suspicious, well‑timed trades on those markets were “morally obscene” and required swift oversight.
- The lawmakers argued the Commodity Exchange Act gives the CFTC clear authority to police event contracts and to stop efforts to evade swap rules, even when trading occurs outside the United States.
- CFTC enforcement director David Miller said insider‑trading laws do apply to these markets and that the agency will focus on significant cases that misuse confidential information rather than chase every suspicious trade.
- Legal uncertainty continues as courts and states test oversight boundaries, with a recent Third Circuit ruling favoring Kalshi and state gaming lawsuits against platforms like Kalshi and Polymarket complicating who regulates these markets.