The U.S. Commodity Futures Trading Commission announced Wednesday that it possesses complete authority to investigate and prosecute illegal activities within prediction markets, after a major trading platform reported discovering insider trading violations.
The federal agency stated it maintains “full authority” to address such violations in event market contracts, referencing Kalshi’s disclosure that the company had identified and suspended trader accounts connected to two separate insider trading incidents.
Worries about insider trading within these emerging but expanding markets have been increasing, with a senior Justice Department official recently identifying them as a prime target for enforcement actions. State gaming authorities have also attempted to regulate these markets, which directly compete with casinos and established betting companies.
In a recent court document, the CFTC asserted it holds exclusive oversight over these markets, intensifying its conflict with state regulators.
Firms registered under CFTC oversight, including Kalshi, are generally required to help monitor misconduct within their platforms and report violations to the federal agency.
Both the CFTC and Kalshi declined to provide immediate responses when contacted for further details.
