Predicting the market breeds insider betting, and US regulators intensify their investigations.

For decades, most of the information that has fueled insider trading has come from Wall Street or the top offices of publicly traded companies across the United States. The rise of prediction markets in Washington has spawned a new wave of profit-seeking behavior. The rapid pace of policy advancement by the Trump administration has allowed individuals with access to inside government information to profit from market fluctuations through speculation. Now, regulatory agencies and law enforcement are intensifying efforts to crack down on suspicious betting activities spread throughout various federal government departments. This presents a new challenge for regulators, as current insider trading regulations were not originally intended to constrain those betting on the outcome of legislation, political elections, or even US military actions. According to sources, regulatory agencies have recently requested information multiple times from two major mainstream prediction trading platforms, Kalshi and Polymarket, to investigate bets predominantly involving political events and military movements related to the US, Iran, and Venezuela. Last month, a special forces soldier was arrested for allegedly betting on the ousting of Venezuelan leader Nicolas Maduro, highlighting the significant risks of public officials using their positions to engage in insider betting. Officials from the US Department of Justice and the Commodity Futures Trading Commission have stated that more enforcement actions will follow.