The top enforcement official at the US Commodity Futures Trading Commission has issued a direct warning to those engaging in insider trading on prediction markets, stating that the agency is actively monitoring suspicious activity. David Miller, the CFTC’s enforcement director, made the remarks at a panel hosted by New York University on Tuesday. Miller, a former federal prosecutor who assumed the role on March 2, told attendees that violators will face enforcement action.
Miller was clear about the legal framework underpinning the agency’s position. “Our position is that event contracts are not gaming. The event contracts at issue are swaps. Insider trading law applies,” he said, according to Reuters. He added that the Commission intends to pursue only cases involving those who tip others or trade using misappropriated information, and will not dedicate resources to minor or trivial matters.
Beyond insider trading, Miller outlined additional enforcement priorities for the agency. These include market abuse and violations of anti-money laundering laws. The CFTC’s focus comes as prediction markets have grown substantially, with monthly trading volume recently surpassing $20 billion, according to data from TRM Labs.
Concerns over insider trading in prediction markets have intensified in recent months following a series of suspicious trades. Several well-timed bets were placed ahead of major announcements by US President Donald Trump, raising questions about the source of traders’ information. In a separate incident, an anonymous trader who wagered on the capture of Venezuelan leader Nicolás Maduro reportedly earned more than $400,000. More recently, unusual trading activity was observed in connection with a potential invasion of Iran and speculation about the death of Ayatollah Khamenei, prompting national security concerns.
The two leading prediction market platforms, Kalshi and Polymarket, have responded to growing public scrutiny by introducing new insider trading rules. The policy changes reflect mounting pressure on the industry to self-regulate as lawmakers and regulators increase their oversight. The credibility of the broader prediction market sector is seen as being at stake amid the controversy.
US lawmakers have also moved to address the issue through legislation. In late March, a bipartisan group unveiled the Public Integrity in Financial Prediction Markets Act of 2026, which targets insider trading by government officials. That same week, a separate bill called the Preventing Real-time Exploitation and Deceptive Insider Congressional Trading Act, or the PREDICT Act, was introduced in Congress.
Democratic lawmakers have separately pressed the CFTC to take a firmer stance, urging the agency to explicitly warn federal employees against using non-public government information to trade on prediction platforms. The combination of legislative proposals and regulatory scrutiny signals a significant shift in how US authorities are approaching the fast-growing prediction market industry.
Originally reported by CoinTelegraph.
