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 the prediction markets.
The letter, dated Sunday, followed reports of activity that appeared consistent with insider trading on the Polymarket prediction market, on contracts related to former Venezuelan President Nicolas Maduro.
2026-January-Cortez-Masto-et-al-Letter-to-CFTC-Chair-Selig-re-Suspicious-Polymarket-Trade
On the Polymarket global exchange, which is not registered with the CFTC, a recently created account made a profit of $436,000 betting that Nicolas Maduro would be removed as president of Venezuela, shortly before he was captured by US forces.
Polymarket’s global site has rules that prohibit market manipulation, but does not have rules that directly prohibit insider trading.
Currently, Polymarket US is only open to members who have received invitations from a waiting list, and only offers sports trading.
Against all odds.
Polymarket’s US app is now being rolled out to those on the waiting list.
We are starting with sports — followed by markets above all. pic.twitter.com/WOoVMszrqc
“While Polymarket US, a registered CFTC Designated Contract Market (DCM), has not fully launched in the United States, suspicious trading on Polymarket’s unregistered exchange raises concerns about the lack of safeguards against insider trading,” the letter said. “This unlikely escalation in negotiations against Maduro’s continued authority in Venezuela just hours before Maduro’s capture exemplifies the dangers of unregulated gambling and raises national security concerns.”
The letter went on to argue that the existence of the contracts themselves on issues such as Maduro’s removal also raises national security concerns.
“If forecast market contracts that imply military operations or other national security considerations are manipulated by privileged information, or even listed, it is possible for foreign adversaries to use this to their advantage,” the letter said.
The senators asked Selig nine questions:
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Have CFTC-regulated exchanges listed contracts similar to Polymarket related to Maduro’s capture?
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Are there other cases of suspicious trading of Maduro-related event contracts facilitated through US-registered DCMs?
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When Polymarket US is fully launched, how will the CFTC ensure that its event contracts comply with all relevant rules and regulations, particularly 17 CFR § 40.11 and 7 US Code § 9?
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According to the Polymarket US Rulebook, “no person shall take action or direct another to take action based on non-public information about the Order, however acquired.” 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 athletes, referees, team employees, and others do not manipulate results; how the CFTC enforces the anti-manipulation requirements of sporting event contract markets; and as often as the CFTC examines against those requirements, the CFTC responded:
“CEA and CFTC regulations require all DCMs to comply with 23 Core Principles on an ongoing basis. The Division of Market Oversight (DMO) is responsible for DCM oversight, and evaluates a DCM’s compliance with certain integrity-related core principles requirements related to its self-regulatory program. […]”
How will the DMO ensure that Polymarket US complies with the 23 Key Principles on an
continuous basis? -
How does the CFTC monitor suspicious trading activity in event contracts? If so, what is the process for identifying and remediating insider trading?
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Does CFTC regulation 180.1 (17 CFR 180.1) apply to cases of fraud and manipulation in event contracts?
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Has the CFTC, including the DMO or any other oversight or enforcement arm of the CFTC, ever investigated an event contract for insider trading?
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Has the CFTC coordinated with state commodity regulators or other appropriate state agencies with oversight of gambling activities?
