Seven members of the US House of Representatives sent a letter to Commodity Futures Trading Commission (CFTC) Chair Michael Selig, asking for information on the agency’s inaction on insider trading on prediction markets and event contracts related to war and conflicts.<\/p>\n
In a Monday letter, the seven US lawmakers said<\/a> that the CFTC had the authority under the Commodities Exchange Act \u201cto apply its rules and regulations for the purpose of preventing evasion of the [act\u2019s] underlying swap provisions.\u201d The statement signaled that the representatives affirmed Selig\u2019s position<\/a> that the commission had jurisdiction over prediction markets.<\/p>\n However, the House members expressed concerns about how the CFTC was policing \u201cmorally obscene\u201d event contracts, including those on US military actions in Iran and Venezuela \u2014 in those cases, there were suspicious trades<\/a> related to the timing and outcomes of US military involvement.\u00a0<\/p>\n \u201cSuch corrupt trades deserve swift and decisive oversight,\u201d said the letter. \u201cAllowing these contracts to persist raises troubling concerns about the Commission\u2019s desire and capacity to fulfill a global regulatory role.\u201d<\/p>\n The legal battles over regulating prediction market platforms like Kalshi and Polymarket are being waged both at a federal and state level. Several US state gaming authorities have filed lawsuits alleging<\/a> that the companies are illegally offering sports bets, while the CFTC, under Selig, claims that the event contracts on the platform amount to swaps and fall under its federal regulations.<\/p>\n The seven House members requested that Selig respond to their six questions by April 15.<\/p>\n Related: <\/strong><\/em>Polymarket bags 97% of onchain prediction market fees after pricing overhaul<\/strong><\/em><\/a><\/p>\n In one of the most recent legal decisions, the US Court of Appeals for the Third Circuit affirmed a lower court ruling<\/a> blocking New Jersey gaming authorities from filing enforcement actions against Kalshi. Two out of three circuit judges said that the company had a \u201dreasonable chance of success\u201d in arguing that federal commodities laws preempted state authorities.<\/p>\n The Monday letter followed CFTC enforcement director David Miller responding to concerns<\/a> over insider trading, which has also resulted in legislation<\/a> proposed by Democrats. According to Miller, the commission would only prosecute instances \u201cagainst those who tip or trade with misappropriated information,\u201d but not dedicate resources to \u201ctrivial\u201d cases.<\/p>\n![\"Government,](\"https:\/\/s3.cointelegraph.com\/uploads\/2026-04\/019d69ad-f13a-7147-8049-5adfb0872869.png\")
CFTC enforcement director says agency is \u201cwatching\u201d for insider trading<\/h2>\n