A group of House Democrats pressed the Commodity Futures Trading Commission in a letter sent late Monday on why the agency has not cracked down on bets placed on war and other government actions via offshore prediction markets.
The letter to CFTC Chair Michael Selig, obtained first by CNBC, questions the agency’s role in regulating prediction markets, which have surged in popularity of late and drawn the ire of a growing number of lawmakers.
“Recent high-profile instances of alleged insider trading on prediction market platforms relating to U.S. government actions — including the military’s intervention in Venezuela and our recent attack on Iran —have fueled concern that the CFTC does not have adequate control over these fast-growing markets,” wrote the group, led by Reps. Jim McGovern and Seth Moulton, both Massachusetts Democrats.
Well-timed bets on the ouster of Venezuelan President Nicolas Maduro and the U.S.-Israeli attack on Iran have raised concerns about the possibility of insider trading. On popular prediction markets like Kalshi and Polymarket, users can buy event contracts on things like who will win the NCAA men’s basketball national championship or how long the Department of Homeland Security shutdown will last.
