"While Kalshi's internal enforcement program handled these matters, under the Act, the Commission has full authority to police illegal trading practices. Sure, yeah, the CFTC can police this. But it didn't. And there's not a lot of reasons to believe it will."
"The CFTC, which had about 120 staffers assigned to enforcement as of 2025, oversees not only prediction markets, but agricultural and stock futures, and part or possibly all of the crypto market. The number of people assigned to enforcement has been shrinking even as the agency's supervision portfolio has grown."
"The volume of suspicious activity we see is significantly higher than what any platform publicly acknowledges. Whether that's insiders, sophisticated researchers, or a mix of both, the pattern data is there and it's worth examining."
The CFTC faces significant challenges in policing insider trading within prediction markets. Kalshi, a prediction market exchange, recently announced fines against a politician and YouTube influencer employee for insider trading, but these were handled through the exchange's internal enforcement rather than CFTC action. The CFTC acknowledged its authority to police illegal trading practices but has not exercised it effectively. The agency's enforcement capacity has declined substantially, with staffing dropping from 160 full-time employees in 2024 to a requested budget of only 114 for 2026, while its supervisory responsibilities have expanded to include agricultural futures, stock futures, crypto markets, and prediction markets. Analysts tracking suspicious trading activity report significantly higher volumes of questionable trades than platforms publicly acknowledge, suggesting many insider trades go undetected.
Read at The Verge
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