The spoilsports at the US Commodity Futures Trading Commission no longer want you profiting off of geopolitical turmoil and other grim happenings in the world on Polymarket — or profiting unfairly, at least. The agency’s chairman Michael Selig vowed to crack down on insider trading on the controversial prediction market, which the Trump administration has eagerly embraced.
“We’re going to find them, and we’re going to bring actions,” Selig told Wired in an interview this week.
Polymarket’s website is blocked in the US because trading laws prohibit wagers related to war, terrorism, and assassinations. Tons of US traders use a VPN to access it, though, and can further anonymize their transactions by using the platform’s currency of choice, crypto. That can make sussing out who’s behind suspicious bets on there a tall order, but Selig says AI tools are helping the small agency bring the bad actors to light.
“You’ve got so much data,” Selig told Wired. “When we feed it into AI, we get really great information. It can help us understand things, like where we might want to investigate, or when we might need to send a subpoena to a trader.”
Selig’s comments are notable, given that he works in an administration that’s made huge overtures to Polymarket and its rival Kalshi. The White House has dropped Biden-era investigations into Polymarket and allowed it to form a US entity, paving the way for a version of the site that can operate with full-legal say-so. The president’s son Donald Trump Jr.’s venture capital firm has also heavily invested into the company.
A major roadblock to mainstream adoption are Polymarket’s constant scandals over alleged and actual instances of insider trading on the platform. The issue gained national attention in January this year when one trader made over $400,000 with a suspiciously timed bet on former Venezuelan president Nicolás Maduro’s ouster that was made just hours before US troops invaded the country and abducted him.
In April, the issue dominated headlines again after reports that dozens of Polymarket accounts placed highly specific bets that the US and Iran would reach a ceasefire agreement right before the agreement was announced, despite Trump’s anything but peaceable threat that a “whole civilization will die tonight” if Iran didn’t give into his demands. That same month, members of Congress demanded that CFTC to investigate foreign prediction markets that allowed bets on war, as concerns of government insiders trading on these platforms swirled.
Selig doesn’t plan to let them down. “We’re surveilling the markets on a global basis,” he told Wired. The agency will exert extraterritorial jurisdiction to go after suspicious bets on international platforms like Polymarket whenever possible, but only in “extreme circumstances.”
“In any extraterritorial litigation, there’s going to be challenges to our authority, and that could also impair our ability to bring cases in the future,” Selig explained.
For Polymarket to continue succeeding in the US, it’ll probably need to clean up its act. In making these avowals, you could argue that Selig is giving the impression that that process is already happening. So far, only a single American has been charged with insider trading on the platform: a US army soldier who was arrested last month for placing a bet related to Maduro’s capture, Wired noted. But the other culprits who made similar bets, like the one who walked away with $400,000, haven’t been brought to light — yet.
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