CFTC Chair Selig Wants US to Lead Prediction Markets, But Warns of Insider Trading Risks

Commodity Futures Trading Commission chief aims to balance innovation and enforcement in new regulatory framework for fast-growing industry.

Apr. 10, 2026 at 10:08am

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A cinematic close-up of the intricate machinery and displays of a high-tech trading console, conveying the complex financial infrastructure behind prediction markets without using any text or identifiable elements.As the CFTC works to establish a new regulatory framework for the fast-growing prediction market industry, the agency is focused on protecting against insider trading and manipulation while fostering innovation.Philadelphia Today

Commodity Futures Trading Commission chairman Michael Selig is pushing to make the United States the global hub for prediction markets, which allow users to bet on everything from election outcomes to Oscar winners. However, Selig warns that aggressive protection against insider trading is crucial to ensure the integrity of these markets as they rapidly expand.

Why it matters

Prediction markets drew widespread attention during the 2024 election cycle, when platforms like Kalshi and Polymarket were able to forecast a Trump landslide at a time when major polls said the race was a toss-up. This has raised concerns about the potential for insider trading and manipulation, prompting the CFTC to take a more active role in regulating the industry.

The details

Selig, who was sworn in as CFTC chair in December 2025, says the agency is investigating various participants in prediction markets on a daily basis and working with exchanges to crack down on insider trading and manipulation. The CFTC has also filed suit against several states that are trying to regulate prediction markets as gambling products under state jurisdiction, arguing that federal law should govern these markets.

  • Selig was sworn in as CFTC chair on December 22, 2025.
  • Last month, the CFTC issued an advanced notice of proposed rulemaking to gather public input on a new regulatory framework for prediction markets.
  • Last week, the CFTC filed suit against Illinois, Arizona, and Connecticut over their attempts to regulate prediction markets as state-level gambling products.

The players

Michael Selig

The 36-year-old chairman of the Commodity Futures Trading Commission, who is pushing to make the United States the global hub for prediction markets while also cracking down on insider trading and manipulation in the industry.

Kalshi

A prediction market platform that requires users to undergo identity verification and reports all trading activity to the CFTC daily.

Polymarket

An offshore prediction market platform that operates without the same oversight and identity verification requirements as Kalshi, allowing anonymous crypto wallets to potentially sway public perception.

Robin Hanson

A George Mason economist who pioneered prediction market theory and believes that attempts to regulate these markets are ultimately aimed at undermining free markets.

David Bieri

An economist at Virginia Tech who argues that prediction markets make insider trading uniquely easy because they allow betting on single, discrete events.

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What they’re saying

“I want the United States to be the markets capital of the world. Whether it's prediction markets, crypto, traditional markets — if we don't take leadership there, we're going to see these markets flourish offshore.”

— Michael Selig, CFTC Chairman

“We're investigating various participants in the markets on a daily basis, we're working with the exchanges … and the exchanges have brought several actions now against persons for insider trading and manipulation in their markets.”

— Michael Selig, CFTC Chairman

“If you're going to use inside information to bet on particular stocks, there are a whole bunch of things that can affect the prices of these things. Prediction markets make insider trading uniquely easy because they allow you to bet on a single, discrete event.”

— David Bieri, Economist, Virginia Tech

“People don't like prediction markets and decided that [highlighting possible] insider trading is the approach to take' to undermine them. Ordinary markets have insider trading they don't like to admit [to], and the vast majority of it is never caught.”

— Robin Hanson, Economist, George Mason University

“The average retail trade on Kalshi is well under $100 … making it hard to profit meaningfully from inside information without triggering automatic flags. Any trading activity that's abnormally large is going to stand out. We don't have anybody making those kinds of profits in our market.”

— Bobby DeNault, Head of Enforcement, Kalshi

What’s next

The CFTC is currently working to incorporate more than 1,000 public comments into its proposed regulatory framework for prediction markets, which will aim to balance innovation and oversight to protect against insider trading and manipulation.

The takeaway

As prediction markets continue to grow in popularity and influence, the CFTC faces the challenge of establishing clear rules and oversight to ensure the integrity of these markets while also fostering innovation and keeping them from moving offshore. The outcome of this regulatory process will have significant implications for the future of this emerging financial sector.