Senator Elizabeth Warren (D-Mass.) and over 40 lawmakers have formally petitioned regulators to address growing concerns of illegal insider trading by federal employees on prediction markets. In a letter dated March 30, 2026, the coalition urged the Commodity Futures Trading Commission (CFTC) and the Office of Government Ethics (OGE) to issue clear guidance reminding government personnel of their legal obligations under the STOCK Act.
The letter highlights recent incidents, including a Polymarket user profiting $400,000 from betting on White House Press Secretary Karoline Leavitt’s January 2026 speech ending under 65 minutes and bets on Iran’s invasion tied to Ayatollah Khamenei’s death, prompting national security concerns under the Commodity Exchange Act.
This effort builds on Moulton’s March 26, 2026, prohibition on his congressional staff using prediction markets like Polymarket, which have gained traction for event forecasting but raise ethical risks from access to non-public information.
: Warren, 40+ Lawmakers Push Regulators to Address Illegal Insider Trading i
The lawmakers highlighted several suspicious incidents since January, including a Polymarket user netting $400,000 on the capture of a former Venezuelan leader. Another case involved traders successfully betting that a White House press briefing would end seconds before a 65-minute threshold. These events have fueled speculation that individuals with non-public governmental information are profiting from event contracts.
Strengthening Regulatory Oversight
The move also follows a surge in prediction market popularity, with trading volumes reportedly exceeding $60 billion in 2025. Platforms like Kalshi and Polymarket have already begun tightening “insider-trading firewalls” by blocking politically exposed persons and automating enforcement against conflicted participants.
Lawmakers emphasized that the Commodity Exchange Act (CEA) already prohibits federal employees from using non-public information for personal gain. They are now requesting a staff-level briefing to investigate whether current detection methods are sufficient to prevent such “information abuse”.
Notably, the SEC and CFTC announced a joint plan to classify digital assets, which largely suggests that most crypto assets are not securities. This new framework aims to clarify which digital assets are commodities, tools, or financial instruments, replacing past legal uncertainty. The goal is to build institutional trust and spur innovation by moving toward integrating cryptocurrency into the standard financial system.
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