Kalshi, Polymarket Flag 140+ Suspected Insider Traders as CFTC Enforcement Stalls
Prediction market platforms are referring dozens of suspected insider traders to the CFTC, but a gutted enforcement staff has charged just three people.
This article was produced with AI assistance and edited by the ON360 newsroom.
Prediction market operators Kalshi and Polymarket have flagged more than 140 suspected insider traders to U.S. regulators so far in 2026, but the Commodity Futures Trading Commission (CFTC) has managed to bring civil charges against just three people, according to Gambling Insider, which cited reporting by The New York Times.
Kalshi referred 32 possible insider trading cases to the CFTC in the three months ending in June alone, bringing its 2026 total past 50. As many as 20 open investigations currently rest solely on evidence Kalshi has supplied. Polymarket has gone further, referring more than 90 account holders to authorities in the U.S. and abroad. At least a dozen other prediction market platforms currently operate in the United States.
A regulator stretched thin
The gap between referrals and enforcement traces largely to staffing. The CFTC’s enforcement division has shrunk to its smallest size in at least two decades — roughly 100 people tasked with overseeing a commodities market worth trillions of dollars, on top of the fast-growing prediction market sector.
Cuts made under the Trump administration have hit some offices particularly hard. In Chicago, the CFTC’s enforcement branch went from roughly 20 trial attorneys to effectively zero after its last remaining trial lawyer resigned in February, with most departures coming through voluntary buyouts and early retirement offers.
The numbers tell the story: the agency logged 58 enforcement actions and a record US$17.1 billion in monetary relief in fiscal 2024. In the 12 months since the change in administration, it has brought just 11 enforcement actions, recovering less than US$1 billion — and less than US$10 million of that came from cases filed under the current leadership.
Sen. Elizabeth Warren asked the Government Accountability Office in July to investigate the CFTC’s workforce reductions, noting staffing had fallen 25 per cent since January 2025 even as the agency’s mandate potentially expands to cover prediction markets and digital assets. CFTC Chair Michael Selig, currently the only sitting member of a five-person commission, has said the agency will continue pursuing illegal trading on confidential information — a pledge former Chicago enforcement attorney David Slovick has publicly questioned given the depleted headcount.
Old rules, new markets
Beyond staffing, existing insider trading law was built over decades to police stocks and commodities, leaving gaps for conduct unique to prediction markets. Former New York congressman George Santos was fined US$35,000 after making US$17,000 on Kalshi wagering on whether he would attend the State of the Union — but the CFTC charged him with market manipulation rather than insider trading, since he misled other traders rather than exploiting confidential corporate data.
Congress has taken notice. Lawmakers have introduced the Public Integrity in Financial Prediction Markets Act, which would bar elected officials, congressional staff and executive branch employees from trading certain prediction market contracts. In March, more than 40 lawmakers urged the CFTC and the Office of Government Ethics to warn federal employees about insider trading risks, pointing to a Polymarket user who made nearly US$410,000 betting on the capture of former Venezuelan leader Nicolás Maduro.
The CFTC has also resisted calls, including from the NFL, for a blanket ban on contracts tied to events where inside information is concentrated among a small group — such as trades, starting lineups or live broadcast comments. Rules proposed by the agency in June favour reviewing such contracts case by case rather than prohibiting entire categories.
Why it matters for Canadian watchers
The enforcement gap comes as prediction markets continue pushing into sports-adjacent contracts that resemble regulated sports betting products offered in Ontario and other provinces. Canadian regulators and operators have watched the sector closely as U.S. courts and agencies debate whether such products constitute gambling, and how oversight should be structured as volumes grow.
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