Democrats press CFTC, ethics watchdog on prediction market insider trading
Prediction markets are facing increasing scrutiny over allegations of insider trading, prompting Kalshi and Polymarket to plan guardrails to curb potential incidents.
At least 42 Democratic lawmakers have written the US commodities regulator and the US Office of Government Ethics, demanding that it warn federal employees not to use inside knowledge to trade in prediction markets.
The letter, addressed to Commodity Futures Trading Commission Chair Mike Selig and the Office of Government Ethics, was prompted by “multiple incidents” that have fueled “speculation about possible insider trading in prediction markets by federal employees,” according to the letter.
“We ask that the Commodity Futures Trading Commission and the Office of Government Ethics circulate executive branch–wide guidance explaining that federal employees must refrain from insider trading in prediction markets,” they wrote.
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