GoKawiilis a reporter who writes about tech, money, and human behavior. She joined The Verge in 2014 as science editor. Previously, she was a reporter at Bloomberg.
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The Commodity Futures Trading Commission has a problem: It’s not very good at policing insider trading. And insider trading has become a pressing concern for prediction markets.
Even Kalshi’s recently publicized fines for insider trading — levied against a politician and an employee of YouTube influencer MrBeast — were effectively self-policing. The exchange says it’s opened 200 investigations, frozen some accounts, and had a dozen of its investigations turn into active cases.
“The volume of suspicious activity we see is significantly higher than what any platform publicly acknowledges.”
In response to Kalshi’s announcement, the CFTC put out a statement that effectively read as a sad trombone noise about its own ability to police insiders: “While Kalshi’s internal enforcement program handled these matters, under the Act, the Commission has full authority to police illegal trading practices,” the statement said. 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 — it had 160 full-time employees in 2024, and is requesting a budget for only 114 in 2026.
There are probably other insider trades that are being missed. “The volume of suspicious activity we see is significantly higher than what any platform publicly acknowledges,” says Trevor I. Lasn, who built an information dashboard called 0xInsider to track suspicious trades on Kalshi and its primary competitor, Polymarket. “Whether that’s insiders, sophisticated researchers, or a mix of both, the pattern data is there and it’s worth examining.”
Prediction markets aren’t the only thing that’s relatively new; the CFTC’s ability to police insider trading is, too. Until the passage of the Dodd-Frank Act of 2010, the only prohibited insider trading was that done by CFTC staffers and those of the exchanges it supervises. In some respects, this makes sense, given the agricultural origins of the futures market — like, who has a fiduciary duty to corn? Using the authority newly granted to it by the Dodd-Frank Act, the CFTC came up with a rule modeled on the Securities and Exchange Commission’s insider trading ban.
“The intensity of enforcement is way different.”
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