Warren Urges White House to Adopt Safeguards Against Prediction-Market Insider Trading
Summary
- Sen. Elizabeth Warren called for measures to prevent a repeat of a case involving White House staff trading with inside information on prediction markets.
- The former White House staffer at the center of the case used inside information to place bets on prediction market platform Kalshi and received more than $170,000 in penalties and a three-year trading ban.
- With Warren poised to become the Senate Banking Committee chair next year, insider trading and conflict-of-interest issues tied to prediction markets could emerge as a major focus of congressional oversight.
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Sen. Elizabeth Warren called for measures to prevent a repeat of a case involving White House staff trading on prediction markets with nonpublic information.
CoinDesk reported on November 10 that Warren and fellow Democratic Sen. Jeff Merkley sent a letter to White House Counsel Will Scharf, urging him to explain specific steps to prevent insider trading on prediction markets. The two lawmakers said the episode raises serious concerns about the Trump administration's ethics oversight system.
The controversy began after it emerged that a former staffer responsible for President Donald Trump's speech teleprompter placed bets on prediction markets using advance knowledge of the president's remarks. The staffer was penalized more than $170,000 by the Commodity Futures Trading Commission and prediction-market platform Kalshi, and was banned from trading for three years.
Warren and Merkley criticized the White House for failing to implement meaningful safeguards after the incident. In the letter, they said the only public action so far had been the distribution of a warning memo, and argued that stronger ethics rules are needed to prevent staff from using inside information.
The lawmakers also raised concerns about ties between the Trump family and the prediction-market industry. They pointed in particular to Donald Trump Jr.'s advisory role and business relationship with a related company, saying it presents a potential conflict of interest.
Democrats are also pushing for tighter regulation of prediction markets. Sen. Catherine Cortez Masto has raised similar concerns, while Rep. Ro Khanna has said trading tied to sports prediction markets should be banned outright.
Warren is poised to become chair of the Senate Banking Committee in January next year. That would put prediction-market insider trading and conflict-of-interest issues tied to the Trump administration high on the list of potential congressional oversight targets.
