David Miller, the newly appointed Director of Enforcement at the U.S. Commodity Futures Trading Commission (CFTC), used his first major public remarks to warn that insider trading in prediction markets is illegal and will be actively prosecuted. Speaking at NYU School of Law on March 31, 2026, Miller rejected arguments that prediction markets operate outside traditional insider trading rules, calling that belief a “myth”.
Miller’s comments come amid a broader, intensifying debate about integrity and regulation in prediction markets. He emphasized that prediction market contracts are treated as financial “swaps,” not gambling, and therefore fall squarely under the Commodity Exchange Act. As such, the same anti‑fraud and anti‑manipulation principles that apply to futures and other derivatives would also apply to event‑based contracts.
A central focus of Miller’s remarks was insider trading based on misappropriated material and non‑public information. He made clear that the CFTC will pursue cases involving traders who tip or trade using confidential information, such as undisclosed government actions, corporate decisions, or privileged access, while distinguishing that conduct from lawful trading based on personal expertise or publicly observable information. Miller stated that insider trading will be one of the agency’s top enforcement priorities, and that Miller plans to increase enforcement capacity, including hiring additional staff, and to encourage cooperation by offering reduced penalties or declinations for market participants who self‑report and remediate violations.
The message is clear that more proactive self-policing in the form of data-driven transaction surveillance, internal investigation, and - if necessary - disclosure is the federal government's expectation of prediction market platforms.
Cooperation in our view is binary: you’re either in or you’re out.
