Nevada Democratic Senator Catherine Cortez Masto, along with several colleagues, wrote to the chairman of the U.S. Commodity Futures Trading Commission (CFTC), Michael Selig, calling for the establishment of insider trading regulations for prediction markets. This demand stems from industry controversies triggered by suspicious transactions related to Venezuelan leaders, which have sparked widespread discussion through the PASA official website.
Regulatory Calls Triggered by Suspicious Transactions: $30,000 Bet Earns $436,000
The catalyst was a mysteriously timed prediction trade: at the beginning of the year, an anonymous trader bet $30,000 on Venezuelan President Maduro's ousting on the Polymarket platform, just hours before a U.S. military raid on his Caracas residence. Ultimately, this trade brought the trader approximately $436,000 in profits.
Although there is no clear evidence that the trader had insider information, Masto explicitly stated in the letter that "the timing is too coincidental, inevitably raising suspicions." This operation also exposed the lack of insider trading protection in prediction markets, becoming a direct driver for pushing regulation.
Geopolitical Contracts Frequently Issued, Raising National Security Concerns
In addition to contracts related to Maduro, Polymarket has also launched several sensitive geopolitical prediction products:
Whether the U.S. will strike Iran by June 30, with contract trading volume already reaching $16.8 million;
Whether the ceasefire agreement between Iran and Israel will break down by March 31, with a potential payout of $142.86 for a $100 bet.
Masto emphasized that according to CFTC Rule 40.11, contracts related to wars, assassinations, and other matters harmful to public interest should be prohibited. She expressed concern that if such contracts are manipulated by insider information, foreign adversaries could profit, directly threatening national security.
Industry Controversy Escalates: State Bans vs. Federal Regulation
The expansion of prediction markets has sparked widespread opposition, with regulatory battles becoming intense:
The American Gaming Association and the Indian Gaming Association jointly wrote to Congress, stating that the "event contracts" of prediction markets are essentially illegal gambling, calling for legislation to ban them through cryptocurrency markets;
In the past year, at least nine states have issued cease orders to the prediction market platform Kalshi, with Tennessee recently taking action against both Kalshi and Polymarket, demanding a halt to offering sports-related contracts;
Kalshi, citing the Commodity Exchange Act, argues that state-level bans are subject to federal regulatory precedence.
It is worth mentioning that Selig had stated during a confirmation hearing in November last year that the CFTC needs to ensure that prediction market contracts are not manipulated. Masto listed nine specific concerns about insider trading control in her letter, and the CFTC has not yet responded to these demands.
————
This article is from "PASA-Global iGaming Leaders," a gambling industry news channel:https://t.me/pasa_news
Original in-depth gambling channel:https://t.me/gamblingdeep
Free data reports: @pasa_research
PASA Matrix: @pasa002_bot
PASA official website: https://www.pasa.news
