SEC Enforcement Director Flags Prediction Markets for Insider Trading

SEC Enforcement Director David Woodcock said the agency is watching prediction markets for fraud and securities violations, putting insider trading and manipulation at the center of its concerns as it considers potential enforcement.

Woodcock expects the SEC to pursue enforcement action in the sector. He said trades tied to listed companies’ key performance indicators or earnings measures may fall within the agency’s oversight.

Prediction markets including Kalshi and Polymarket’s U.S. business are primarily regulated by the Commodity Futures Trading Commission (CFTC).