A group of 12 senators signed and sent a letter asking Commodity Futures Trading Commission (CFTC) Chairman Michael Selig to explain the regulator’s approach to insider trading in prediction markets.
The letter, dated Sunday, follows reports that activity on the prediction market Polymarket regarding contracts related to former Venezuelan President Nicolás Maduro appeared to be consistent with insider trading.
Letter from Cortez-Masto and others to CFTC Chairman Selig in January 2026 calling Polymarket-Trade suspicious again
On Polymarket’s global exchange, which is not registered with the CFTC, a recently created account made $436,000 by betting that Nicolas Maduro would be removed from office as Venezuela’s president, shortly before he was captured by US forces.
Polymarket’s global website has rules prohibiting market manipulation, but there are no rules directly prohibiting insider trading.
Currently, Polymarket US is only open to members who have received a waitlist invitation and only offers sports trading.
Despite the difficulties.
Polymarket’s US app is now available to those on the waitlist.
We launched sports first and then everything else. pic.twitter.com/WOoVMszrqc
“While Polymarket US, a CFTC-registered Designated Contract Market (DCM), has not yet fully launched in the United States, suspicious trading on Polymarket’s non-registered exchange raises concerns about the lack of safeguards against insider trading,” the letter states. “The incredible increase in trading targeting Maduro’s continued authority in Venezuela, just hours before his arrest, exemplifies the dangers of unregulated gambling and raises national security concerns.”
The letter also noted that the existence of the contract itself raises national security concerns regarding issues such as Maduro’s ouster.
“If prediction market contracts involving military operations or other national security considerations are manipulated by insider information or even listed, there is a risk that foreign adversaries could exploit this to their advantage,” the letter states.
Senators asked Selig nine questions:
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Do CFTC-regulated exchanges list contracts similar to Polymarket’s related to Maduro’s arrest?
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Are there other examples of suspicious transactions involving Maduro-related event contracts facilitated through U.S.-registered DCMs?
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When Polymarket US fully launches, how will the CFTC ensure that its active contracts comply with all relevant rules and regulations, specifically 17 CFR § 40.11 and 7 US Code § 9?
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According to the Polymarket US rulebook, “No person may act or direct others to act based on non-public order information, regardless of how the information was obtained.” How will the CFTC ensure that Polymarket US complies with this provision?
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In response to the previous letter, when asked how the CFTC ensures that players, referees, team employees and others do not manipulate results; how the CFTC enforces anti-manipulation requirements in the sports contract market; and how often the CFTC conducts inspections under these requirements, the CFTC responded:
“CEA and CFTC regulations require all DCMs to comply with 23 core principles on an ongoing basis. The Department of Market Oversight (DMO) is responsible for DCM oversight and assessment of a DCM’s compliance with certain integrity-related core principles requirements associated with its self-regulatory program. […]”
How the DMO will ensure Polymarket US adheres to the 23 Core Principles
On an ongoing basis? -
How does the CFTC monitor suspicious trading activity in event contracts? If so, what is the process for identifying and correcting insider trading?
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Does CFTC Regulation 180.1 (17 CFR 180.1) apply to fraud and manipulation situations in event contracts?
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Has the CFTC (including the DMO or any other CFTC oversight or enforcement agency) ever investigated event contracts for insider trading?
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Does the CFTC coordinate its oversight of gaming activities with state commodity regulators or other appropriate state agencies?
Regarding the first question, while no exchange appears to be offering contracts that directly mention “capture,” Kalshi users can bet that Maduro will be out of office before the end of the year.
Trade data showed that the odds of Maduro’s ouster appeared to have risen sharply ahead of the announcement of Maduro’s arrest (announced at 4:21 ET), although this could be due to reports of apparent strikes in Venezuela or observers noticing a change in odds on Polymarket.
As far as the issue of insider trading goes, CFTC rules do not ban the practice outright, but only prohibit the use of non-public information if the information is “misappropriated” or involves market manipulation. As a result, certain insider trading regulations may be limited. However, all prediction markets registered with the CFTC generally prohibit all insider trading in their internal rules. The CFTC’s “core principles” include requiring exchanges to enforce their own rules.
Senators have asked for a response by February 9.
It was signed by 12 senators: Catherine Cortez Masto, Chris Van Hollen, Jackie Rosen, Alexa Slotkin, Andy King, Peter Welch, Adam Schiff, Jeffrey Merkley, Cory Booker, John Hickenlooper, Richard Blumenthal and Alex Padilla.
The letter is one of the latest signs that Congress is increasing its focus on prediction markets. On Monday, the American Gaming Association and the Indian Gaming Association sent a letter to Congress calling on representatives to add a ban on sports contracts to an upcoming bill on the structure of the cryptocurrency market.
Today, the AGA and the Indian Gaming Association sent a letter urging Congress to use cryptocurrency market structure legislation to end nationwide sports betting disguised as “event contracts.”
Read this letter ⬇️ https://t.co/iUZ3qSgw4T
“Since the introduction of these contracts, which are indistinguishable from legal sports betting, last January, their volumes have grown exponentially and have expanded beyond single-game outcomes to include complex parlays and even potential bets on college transfer portals,” the letter reads. “This growth has occurred by taking advantage of regulatory inaction by the Commodity Futures Trading Commission (CFTC), which undermines state law and tribal sovereignty, and violates existing federal laws and regulations designed to protect consumers and the integrity of our nation’s financial markets.
“We firmly believe that Congressional consideration of cryptocurrency market structure legislation provides an important bipartisan opportunity to prevent sports betting and casino gambling under the guise of ‘event contracting.'”
The House Agriculture Committee is currently considering a cryptocurrency market structure bill.
The letter follows a letter sent by Rep. Dina Titus to Polymarket CEO Shayne Coplan on Friday. The letter questioned Polymarket’s processes related to insider trading, although it appeared to conflate Polymarket’s global and U.S. sites.
In light of the recent betting activity surrounding the arrest of President Nicolás Maduro, I have serious concerns about this @Polymarketability and willingness to comply @CFTC regulations.
I demand answers from the Polymarket CEO @shayne_coplan Regarding safeguard measures… pic.twitter.com/fHpjLpsykG