Insider Trading Charges Over Military Secrets
Israeli authorities have arrested a military reservist and a civilian for allegedly using classified intelligence to place bets on Polymarket regarding Israel's June 2025 attack on Iran. According to Decrypt, the suspects face criminal charges for leveraging non-public military secrets to profit from prediction market wagers. The investigation highlights the growing concern among governments regarding the intersection of decentralized prediction markets and national security.
SEC Claims Authority as CFTC Reshuffles
In the United States, the regulatory landscape is shifting rapidly. SEC Chair Paul Atkins stated on Thursday that the agency already possesses "enough authority" to regulate at least a portion of the prediction market sector, suggesting a potential crackdown on platforms operating outside clear guidelines. Decrypt reports that Atkins believes existing securities laws may cover certain event contracts.
Simultaneously, the CFTC is restructuring its approach to digital assets. Under new chief Mike Selig, the agency has appointed major crypto executives—including Coinbase's Brian Armstrong and Ripple's Brad Garlinghouse—to its advisory panel, as detailed by CoinDesk. This move signals a potential pivot in how market structure and innovation are debated at the federal level.
Kalshi Expands as Sector Hits $1B Open Interest
Despite the regulatory uncertainty, market activity remains robust. Data tracked by Prediction Markets Tools and reported by The Defiant indicates that total open interest across prediction markets has crossed the $1 billion threshold, driven significantly by recent Super Bowl betting volumes.
Regulated exchange Kalshi is moving to capitalize on this demand by deepening its institutional ties. The platform has partnered with Game Point Capital to expand its sports risk hedging capabilities. As noted by Decrypt, this deal allows Kalshi to tap into the sports insurance market even as it navigates ongoing legal battles regarding election betting markets.