A member of Congress will reportedly push for a bill that would make it illegal for federal officials to trade on prediction markets when they have insider information.
Jake Sherman of Punchbowl News reported that Rep. Ritchie Torres (D-NY) plans to introduce the Public Integrity in Financial Prediction Markets Act of 2026.
The legislation comes after reports of a potential insider profiting from markets at Polymarket about the United States’ attacks on Venezuela and the ouster of President Nicolás Maduro:
Polymarket is a prediction market that operates in the United States under the auspices of the Commodity Futures Trading Commission. However, these markets only existed on Polymarket’s cryptocurrency prediction market that technically only serves an international audience.
For CFTC-regulated prediction markets, insiders are generally supposed to be prohibited from trading on markets for which they have material non-public information.
Here’s more from Sherman on Twitter:
This bill prohibits federal elected officials, political appointees, and Executive Branch employees from engaging in certain transactions involving prediction market contracts when they either possess material nonpublic information relevant to the transaction or could reasonably obtain such information through their official duties.
The restriction applies to buying, selling, or exchanging prediction market contracts tied to government policy, government action, or political outcomes on platforms engaged in interstate commerce.
Passing legislation in Congress in the current environment is of course pretty difficult. There has not been a material push at the CFTC or in Congress to rein in prediction markets or further regulate them as they have exploded in popularity in the past year.
Torres’ interest in prediction markets dates back more than a year. In September of last year, he called on the CFTC to regulate election prediction markets:
“In light of the Court ruling on September 6 overturning the CFTC’s prohibition on event contracts relating to the outcome of elections, I encourage the CFTC to focus its energies and resources on promoting the responsible innovation for which our financial markets are known.
“The CFTC has been considering these contracts for over two years, has benefited from multiple rounds of public comments in support of the market, and has presented its findings in court. I encourage the CFTC to embrace this growth within its regulated markets and to work collaboratively with regulated registrants to facilitate these contracts. …
As you know, election markets have existed for years, unfortunately only on less secure and unregulated exchanges. In light of this, the CFTC should accept the ruling and look forward. I encourage you to focus on promoting responsible innovation, regulating exchanges, protecting consumers, and safeguarding the sanctity and integrity of elections from illegal and unregulated actors.
“With this in mind, I would ask that the Commission consider working toward a plan for regulating these markets, rather than preventing them from existing in regulated markets. I am more than happy to work with the CFTC to provide the resources needed and to address any concerns together.
“Thank you for your consideration. I trust this will receive full and fair consideration consistent with your guidelines.”