Craig, along with Senate Banking Committee ranking members Elizabeth Warren, Senate Agriculture Committee ranking member Amy Klobuchar and House Financial Services Committee ranking member Maxine Waterson sent a letter on Monday to the Commodity Futures Trading Commission (CFTC) and the Office of Government Ethics (OGE), urging them to act.

The lawmakers asked the regulators to circulate executive branch-wide guidance and remind federal employees of their legal obligations, stressing that they must not use insider government information to profit from prediction market trades.

“As concerns grow about illegal insider trading in prediction markets by government officials, the CFTC and OGE should work with appropriate partners to prophylactically remind federal personnel of their obligations in this arena,” the Democrats noted.

They added that such guidance would support the CFTC’s growing focus on “policing illegal trading practices occurring on prediction markets,” pointing to recent regulatory activity, including advance notice of proposed rulemaking.

The lawmakers pointed to a series of recent incidents that have raised concerns over potential insider trading in prediction markets by federal employees.

They highlighted a January 2026 trade in which a Polymarket user reportedly made $400,000 (£303,070) by betting on the capture of Venezuela’s former leader, Nicolas Maduro, raising suspicions that the position may have been gained by using insider government knowledge. They also cited links to White House Press Secretary Karoline Leavitt’s speech in January, where users correctly bet on her speech duration, and other contracts related to geopolitical events, such as the death of Iran leader Ayatollah Khamenei.

“These incidents reinforcing concerns that government officials sometimes have control over events on prediction markets,” the Democrats added.

The group, however, stressed that existing laws prohibit such conduct. Under the Commodity Exchange Act (CEA), as amended by the Stock Act 5 it is “unlawful for any employee or agent of any department or agency of the Federal Government” to use certain information that is non-public, acquired by virtue of the individual’s government employment and may affect or tends to affect the price of a commodity or swap in his personal capacity and for personal gain.

The CFTC has determined that, “event contracts are derivatives that depend on the occurrence or non-occurrence of an event with a potential financial, economic, or commercial consequence,” the Democrats added.

Thus, prohibiting insider trading for government officials engaging in activity in prediction markets.

Meanwhile, recent data from TRM Labs, the California-based blockchain intelligence platform showed monthly trading volume have exceeded $20 billion per month in early 2026, with activity focused on geopolitics, macroeconomics and politics—not crypto.

US senators Adam Schiff and John Curtis recently introduced new legislation “Prediction Markets Are Gambling Act”, to prohibit CFTC-registered entities from listing any prediction contract that resembles a sports bet or casino-style game.

Following senators Adam Schiff and Chris Murphy, Senator Jeff Merkley along with US Representative Jamie Raskin submitted the “STOP Corrupt Bets Act”, a bicameral bill that would ban betting through prediction markets on elections, government actions, sports, and military actions.

CFTC signed a memorandum of understanding with Major League Baseball, marking the first formal agreement between the US derivatives regulator and a professional sports league to create a framework for them to discuss, cooperate and exchange information to protect the integrity of professional baseball and related prediction market activity.

Last week, major prediction market players Kalshi and Polymarket implemented new insider trading guidelines on the back of mounting pressure from industry experts and senators to thwart market manipulation.