U.S. Representative Ritchie Torres has introduced the Public Integrity in Financial Prediction Markets Act of 2026, aiming to prevent federal officials from exploiting insider knowledge on prediction platforms like Polymarket. This follows a controversial market relating to Nicolás Maduro’s status. “If you’re the one making the decision, or if you’re part of the decision‑making process, you’re not predicting anything. You’re simply governing for profit,” commented Rep. Torres. source

The bill targets federal officials, including members of Congress and their staff, prohibiting them from trading on prediction markets related to government policies and actions. This initiative emphasizes financial integrity within governmental frameworks.

Diverse Reactions as Bill Gains Political Momentum

Reaction within governmental and financial circles highlights concerns about potential insider trading risks. Kalshi, a regulated prediction platform, affirmed its compliance with CFTC rules to deter insider activity, indicating existing regulatory awareness.

The bill is supported by over 30 Democratic lawmakers, including names like Nancy Pelosi and Andre Carson, showcasing substantial political backing. Linked prediction platforms might see reduced U.S. participation, but major cryptocurrencies remain unaffected for now.

Regulatory Precedents Highlight Market Scrutiny

New York’s prior legislative efforts and federal actions against unregulated prediction markets serve as precedents. These highlight a growing regulatory interest in such platforms resembling derivatives, now facing insider trading scrutiny.

Experts anticipate potentially reduced activity in on-chain prediction venues due to heightened U.S. regulatory risk. This could direct developers towards decentralized governance models to mitigate jurisdictional pressures and maintain operational viability.