Bad Bets: Recent Enforcement Actions Against Prediction Market Participants Misusing Insider Information

In an article we recently published in the New York Law Journal, we outlined the Commodity Futures Trading Commission’s (CFTC) statutory framework for regulating prediction markets, like Kalshi and Polymarket, in light of recent “insider trading” activity on those platforms.¹ In recent weeks, the CFTC, the Department of Justice (DOJ) and prediction market platforms themselves have engaged in enforcement actions that underscore the regulators’ commitment to prosecuting fraud and market manipulation. This article outlines those actions and recent internal disciplinary actions being taken by prediction market platforms.

The CFTC civil action 

Earlier this year, one successful trade on prediction markets caught regulators’ attention because it was statistically improbable without access to insider information. From December 2025 to January 2026, a trader on Polymarket bought a series of contracts through which he successfully predicted that Venezuelan President Nicolás Maduro would be