Sitting member Congress It introduced legislation to bar congressional staff from trading on prediction markets platforms, expanding a wave of bipartisan legislative activity that has produced at least six distinct bills since January 2026 targeting the intersection of the sector with insider information. The move reflects growing institutional unease with a market structure that by design prices political outcomes – thus creating direct financial incentives for those with privileged access to government decision-making to trade on it.
We believe this latest proposal is less about predictive markets as a financial instrument and more about the accelerating realization that existing ethics frameworks, built on equity, not event contracts, are structurally inadequate for the current regulatory environment. Stock law was not written with Calcium in mind.
The Public Integrity in Financial Prediction Markets Act: Provisions and Coverage
Rep. Ritchie Torres (D-NY) introduced the Public Integrity in Financial Prediction Markets Act in January 2026, which targets federal elected officials, political appointees, executive branch employees, and congressional staff.
The bill prohibits trading on findings related to non-public information accessed through official duties – a narrower interpretation than the blanket ban proposed elsewhere, but one that directly addresses the mechanism of potential abuse. Torres described the legislation as “not a ceiling, but a floor” for federal regulation of the sector.
Rep. Seth Moulton bans employees from using prediction markets like Kalshi and Polymarket https://t.co/HqtpZKkaFc
– CNBC (@CNBC) March 25, 2026
The bill sits alongside a crowded legislative field. Senators Jeff Merkley (D-Ore.) and Amy Klobuchar (D-Minn.) have proposed the Ending Corruption in the Prediction Market Act, which would prohibit the president, vice president, and members of Congress from trading on any prediction market platform directly. Sen. Chris Murphy (D-Conn.) and Representative Greg Cassar (D-Texas) introduced the BETS OFF Act, which would prohibit event trading in sensitive operations and federal functions, targeting contracts related to terrorism, assassinations, war, and government actions deemed controllable by insiders.
The bipartisan Event Contracts Enforcement Act, sponsored by Rep. Blake Moore (R-UT) and Rep. Salud Carbajal (D-CA), directs the Commodity Futures Trading Commission (CFTC) to prohibit contracts related to terrorism, sports, and illegal activities; Moore described this as ensuring that markets “can continue to serve legitimate business interests while protecting Americans from risk.”
None of these bills are close to a vote, and the Trump administration’s stance toward prediction markets has been permissive rather than restrictive – a tension that greatly complicates the legislative calculations.
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Market forecasting and the inside information problem
The regulatory backdrop to this legislative surge runs through the contested relationship between the CFTC and event contracts. The agency was fined Polymarket $1.4 million in January 2022 and forced the platform to ban US users after a cease-and-desist action. Calci’s subsequent legal challenge to the CFTC’s rejection of congressional control contracts led to a ruling by a D.C. District Court in September 2024 that election contracts do not constitute “gaming” – a decision that materially expanded the legal operating space for US-facing prediction platforms and prompted the current legislative response.
A central unanswered question remains whether Congress can create a workable framework for insider trading in event contracts — instruments that are neither securities nor futures in the traditional sense — without first dissolving the CFTC’s jurisdiction over them.
Prediction markets are one of the most exciting innovations in financial markets. After a very long time, @Koftak It fails to provide guidance for these markets used by millions of Americans. This ends today.
Read the steps the agency is taking here⬇️…
– Mike Selig (@ChairmanSelig) March 12, 2026
Concerns about insider trading are not hypothetical. The $400,000 payment to Polymarket’s new account, which coincided with the capture of former Venezuelan President Nicolas Maduro by US forces, illustrated the revelation with uncomfortable precision. Responses at the platform level were partial: Calci banned politicians and athletes from betting on their campaigns or private events, while Polymarket committed to limiting insider trading — measures that Congress has publicly called inadequate in the absence of federal mandates.
The remoteness of cryptocurrency infrastructure exacerbates the compliance challenge. Polymarket settles contracts in USDC on Polygon, which means any federal trading ban for covered administrators would involve on-chain activity that existing brokerage reporting frameworks cannot capture. An employee in a position at Polymarket does not create a 1099-B form that a compliance officer can audit in the traditional sense.
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Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to provide accurate and timely information but should not be considered financial or investment advice. Since market conditions can change rapidly, we encourage you to verify the information yourself and consult with a professional before making any decisions based on this content.
Daniel Francis is a technical writer and Web3 educator specializing in macroeconomics and DeFi mechanics. A crypto native since 2017, Daniel brings his background in cross-chain analytics to author evidence-based reports and detailed guides. It is certified by the Blockchain Council and is dedicated to providing “information gain” that cuts through the market noise to find blockchain’s real-world utility.
