The U.S. launches a significant bill for the regulation of prediction markets: strict crackdown on insider trading, comprehensive restrictions on official trading.

Gate News reports that in 2026, the United States Senate proposed a key piece of legislation targeting trading behaviors in prediction markets—the “Financial Prediction Markets Public Integrity Act,” aimed at curbing government officials from using non-public information to participate in event contract trading. The bill was jointly sponsored by Todd Young, Elissa Slotkin, John Curtis, and Adam Schiff, covering core groups such as the President, Vice President, members of Congress, and federal agency employees.

According to the bill, any individual possessing “material non-public information” is prohibited from trading prediction market contracts on platforms in the United States or abroad. “Material non-public information” refers to data or policy information that could influence rational investors’ decisions but has not yet been made public. This definition provides a clear regulatory standard and directly addresses recent market concerns about information asymmetry in trading.

Regarding penalties, violators will face severe economic sanctions, with fines equal to twice the illegal gains or $500 (whichever is higher). Additionally, all prediction market trades exceeding $250 must be reported within 30 days, including details such as contract specifics, trading prices, platforms used, and profit and loss status, thereby strengthening transparency and traceability.

Meanwhile, the House version, the “PREDICT Act,” proposed by Adrian Smith and Nikki Budzinski, further broadens the scope of regulation by including the spouses and dependents of officials as restricted parties, setting a penalty of 10% of the trade amount, and requiring the surrender of all illegal profits.

The passage of these bills reflects the rapidly increasing importance of prediction markets within the U.S. regulatory framework. As event-driven trading continues to expand in the cryptocurrency and financial sectors, regulators are accelerating the development of compliance frameworks to prevent insider trading and systemic arbitrage risks.

Currently, prediction markets are gradually moving from marginal innovation to mainstream financial instruments, and the intensive implementation of regulatory policies may reshape their future development paths and participation thresholds.