Federal prosecutors and regulators are cracking down on suspicious betting in political prediction markets, Bond.az reports.
The Commodity Futures Trading Commission (CFTC) and the Justice Department are demanding information from top platforms like Kalshi and Polymarket.
The move follows a sudden surge in wagers tied to fast-moving political events, new laws, and U.S. military operations.
The enforcement push shows that regulators are rushing to keep pace with a flood of money targeting political volatility. The risk of insiders using government secrets became clear last month when authorities arrested Gannon Ken Van Dyke, a U.S. Army special forces soldier.
Officials say he used confidential military briefings to make $400,000 on Polymarket by betting that Venezuelan leader Nicolás Maduro would be overthrown.
Investigators are also looking into a spike in oil bets placed just minutes before President Trump announced a delay in military strikes on Iran. That announcement caused big swings in energy and stock markets.
The rapid growth of these platforms has caused friction over standard financial rules. Kalshi is regulated by the CFTC and collects basic identity details, but it does not ask users for employer information.
Polymarket is based offshore and does not verify user identities at all. Instead, it relies on public blockchain records to spot unusual trading activity.
Manhattan U.S. Attorney Jay Clayton criticized this lack of record-keeping at a financial event on Wednesday, stating, "If they are going to function in a way that society can have confidence in them, I think they are going to have to have that record-keeping."
Proving insider trading in prediction markets is difficult because current laws were written for corporate stocks, not government actions. However, regulators signal that more cases are coming.
Speaking at George Washington University Law School, CFTC Enforcement Chief David Miller warned, "Unfortunately, as people know, it's become a real problem in prediction markets. It has serious consequences for market integrity and trust."
