CFTC Cracking Down on Insider Trading in Prediction Markets

Commodity Futures Trading Commission (CFTC) Director of Enforcement David Miller has signaled that the agency’s posture is shifting, concluding an era of regulation by enforcement and returning to its core mission of combating fraud, manipulation, and market abuse.

Skadden wrote about the developments in an article on its website. Miller’s remarks, made during a New York University Law School appearance in March 2026, addressed the agency’s authority over insider trading in prediction markets and a forthcoming overhaul of cooperation and self-reporting policy.

The CFTC oversees commodity futures and derivatives markets, including the prediction market sector. Two key legal provisions govern insider trading in these markets: Rule 180.1, which imports the misappropriation theory from securities law, and Section 4c(a)(4) of the Commodity Exchange Act, which bars government employees from trading on nonpublic information tied to government action.

Miller’s remarks addressed a perceived misconception that insider trading rules do not reach prediction markets. The CFTC can pursue anyone who trades or tips on misappropriated material nonpublic information. He also highlighted a new Memorandum of Understanding with Major League Baseball to protect sports event contracts.

Miller previewed a binary cooperation framework: parties either cooperate fully or they do not; full self-reporting and remediation create a clear path to declination, absent aggravating factors.

Legal teams with clients tempted to wager in prediction markets should treat CFTC insider trading controls as a compliance priority on par with securities law obligations. Enforcement trends confirm the agency will pursue tipping and misappropriation, meaning greater risk for clients privy to government information.

There will be meaningful incentives for self-reporting, and clients should be counseled to disclose promptly rather than await regulatory contact. Board governance frameworks should be updated to reflect the CFTC’s binary cooperation standard, as partial disclosure is unlikely to secure favorable treatment.