The Coalition for Prediction Markets responded to recent concerns of insider trading facilitated with a full-page ad in The Washington Post.
The trade group made the effort to advocate for regulated prediction markets with an ad in the Washington Post that layouts out the differences between prediction markets that are registered with the Commodity Futures Trading Commission (CFTC) and unregulated platforms.
The Coalition of Prediction Markets reiterated the willingness of its members to adhere to safe and transparent trading that is backed by the CFTC as the proliferation of sports event contracts and certain political trading markets stir nationwide controversy.
The ad is the start of a forthcoming PR campaign by the coalition in support of federal regulation by the CFTC for prediction markets, per Business Insider. The campaign, which will roll out over the next several months, is expected to cost “seven figures.”
As of Jan. 28, the Coalition of Prediction Markets has a membership that includes Coinbase, Crypto.com, Kalshi, Robinhood and Underdog.
Coalition’s ad responds to recent insider trading concerns
The Coalition for Prediction Markets is advocating for CFTC-regulated prediction markets and their bans against insider trading after a prediction market, Polymarket, offered event contract trading on the capture and arrest of Venezuelan President Nicolás Maduro.
A trader on Polymarket’s global site, which is not available in the U.S., was able to pocket more than $400,000 after trading roughly $30,000 on Maduro’s future political status in Venezuela before his arrest by U.S. federal authorities. The trades sparked insider trading concerns and action by key stakeholders despite no confirmation that the trading was done with insider knowledge.
The American Gaming Association and Indian Gaming Association responded to the insider trading claims by sending a letter to Senate and House members that raised concerns about political contracts that seek to “capitalize on tragedy, invite manipulation, and undermine public trust. Meanwhile, a lawmaker in New York took legislative action.
Earlier this month, Rep. Ritchie Torres introduced the Public Integrity in Financial Prediction Markets Act, a measure that aims to ban federal officials and executive branch employees from trading event contracts that are related to government action or policy.
Polymarket sparks controversy amid US reentry
Polymarket is not a member of the Coalition for Prediction Markets.
Polymarket exited the U.S. in 2022 after being ordered to pay a $1.4 million civil monetary penalty by the CFTC for the company’s failure to register as a designated contract market. Last month, Polymarket rolled out sports event contracts to select users in the U.S. Polymarket prepared to reenter the U.S. by acquiring CFTC-registered derivatives exchange QCX and its affiliated clearing house. The deal for the two properties was valued at $112 million.
