TLDR
- Kalshi referred 32 insider trading cases to the CFTC in the second quarter of 2026, pushing its 2026 total past 50.
- Polymarket has flagged more than 90 account holders to authorities in the U.S. and overseas this year.
- The CFTC has only filed civil charges against three prediction market traders despite the wave of tips.
- CFTC staffing cuts have left its enforcement division with about 100 people and no trial attorneys in Chicago.
- Lawmakers are pushing bills like the Public Integrity in Financial Prediction Markets Act to close legal gaps.
Prediction market platforms are flagging suspected insider traders faster than regulators can act on them. Kalshi and Polymarket have sent authorities more than 140 combined tips in 2026.
The New York Times reported that Kalshi referred 32 possible insider trading cases to the CFTC in the three months ending in June. Kalshi has now flagged more than 50 traders this year.
Polymarket has referred more than 90 account holders to authorities in the U.S. and abroad. That puts the platform ahead of Kalshi in raising alarms.
Despite these referrals, the CFTC has only brought civil charges against three prediction market traders. As many as 20 open investigations rely solely on evidence from Kalshi.
More than a dozen other prediction market platforms also operate in the U.S. That adds to the volume of potential cases regulators must sort through.
CFTC Staffing Falls to Multi-Year Low
The CFTC’s enforcement division has shrunk to its smallest size in at least two decades. Staff cuts under the Trump administration drove much of the decline.
The division now has about 100 people. They are responsible for policing the multitrillion-dollar commodities market as well as prediction markets.
Chicago has felt the cuts hardest. The office went from roughly 20 trial attorneys to none after its last trial lawyer resigned in February.
The CFTC brought 58 enforcement actions and collected $17.1 billion in monetary relief in fiscal 2024. In the year after the administration changed, it filed just 11 actions and collected less than $1 billion.
Sen. Elizabeth Warren asked the Government Accountability Office in July to review the CFTC’s staffing cuts. She said the agency’s workforce fell 25% since January 2025.
CFTC Chair Michael Selig is currently the only sitting member of the five-person commission. He has said the agency will pursue people who trade on confidential information.
Legal Gaps Complicate Insider Trading Cases
Current insider trading rules were built around stock and commodity markets over many decades. Prediction markets cover events like elections and sports, which existing law does not fully address.
Former New York Congressman George Santos was fined $35,000 after making $17,000 on Kalshi by betting on whether he would attend the State of the Union. The CFTC charged him with market manipulation instead of insider trading, since his conduct fell outside the current statute.
In March, more than 40 lawmakers asked the CFTC and the Office of Government Ethics to warn federal employees about insider trading risks. They pointed to a Polymarket user who made almost $410,000 betting on the capture of former Venezuelan leader Nicolas Maduro.
Congress has introduced the Public Integrity in Financial Prediction Markets Act. The bill would bar elected officials, congressional staff, and executive branch employees from trading certain prediction market contracts.
The NFL has asked the CFTC to ban contracts tied to trades, starting lineups, and live broadcaster comments. The league argues too few people control that kind of information.
The CFTC proposed new rules in June. Rather than banning high risk contracts broadly, the agency plans to review each contract one at a time.
For now, prediction market platforms continue flagging suspected misconduct by the dozen. The CFTC’s enforcement system is still working through the backlog.
