U.S. Senators Question White House Over Kalshi: Insider Trading Controversy in Prediction Markets Grows
Elizabeth Warren and Jeff Merkley have demanded answers from the White House over insider trading on Kalshi.
Insider trading in prediction markets has once again become a political issue in the United States. Democratic Senators Elizabeth Warren and Jeff Merkley sent a letter to White House Counsel Will Scharf on November 9, 2026, asking what measures had been taken following trades made by a former presidential staff member on the Kalshi platform. According to a report published by CoinDesk on November 10, the senators are calling for stronger rules to prevent public officials from using information obtained through their official duties to trade in prediction markets.
How Were the Trades on Kalshi Uncovered?
According to the senators' official letter dated November 9, the controversy centers on Gabriel Perez, who previously worked as the teleprompter operator for President Donald Trump. Perez was found to have used advance knowledge of phrases Trump would include in his speeches to trade prediction contracts on Kalshi. The U.S. Commodity Futures Trading Commission (CFTC) announced an enforcement action against Perez in August 2026.
According to the agency's official enforcement order, Perez was ordered to pay $173,539 and was prohibited from trading in the relevant markets for three years. The trades identified through Kalshi's internal investigation became an important part of the CFTC's enforcement proceedings. The case raised questions about how nonpublic information available to government officials should be monitored and regulated in prediction markets.
What Explanations Did Warren Demand From the White House?
Warren and Merkley argued that the White House administration had failed to take sufficient precautions following the incident. The senators requested clarification of the existing ethics rules and oversight mechanisms governing public employees' participation in prediction markets. Their letter also questioned what new policies had been implemented to prevent similar incidents from occurring again.
The senators also drew attention to the Trump family's business activities connected to prediction markets. In particular, Donald Trump Jr.'s relationships with Polymarket and Kalshi were raised in discussions about potential conflicts of interest. However, these business connections alone do not establish that any illegal trading has taken place. The criticisms expressed by the senators should not be interpreted as the findings of an official court ruling or the outcome of a new enforcement proceeding.
Regulatory Debate Over Prediction Markets
Platforms such as Kalshi and Polymarket allow users to trade contracts tied to the outcomes of elections, economic developments, and various other events. The growth of these markets has intensified debates over how traditional financial market insider trading rules should apply to event contracts.
The CFTC's enforcement action against Perez represents a concrete example of how regulatory authority can be exercised in this area. However, Warren and Merkley argue that individual enforcement actions are insufficient and that government institutions need more comprehensive preventive rules. No official White House response to the senators' latest letter was available in the sources reviewed.
Author's Commentary on the Issue
The latest development in the United States demonstrates that prediction markets are not merely a new category of financial products but also present significant ethical and regulatory challenges. In particular, the use of information accessed by public officials through their official responsibilities for financial gain poses serious risks to market integrity.
Although the CFTC's enforcement action demonstrates that existing rules can be applied, it remains uncertain whether the more comprehensive regulations requested by the senators will be implemented.
Looking ahead, the White House's response and any new measures introduced by regulatory authorities will be important developments to watch.
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Disclaimer: This content is for informational purposes only and is not investment advice. Cryptocurrencies are high-risk; make investment decisions based on your own research.
Content Editor and Writer
Dr. Mesut İnan is a researcher, academic and crypto journalist who has been producing content about cryptocurrencies since 2018. He brings a different perspective to the industry by combining his expertise in sociology with the cryptocurrency ecosystem. Before joining Kriptofoni as co-founder, content editor and writer, İnan worked for several cryptocurrency media platforms: he was an editor and writer at Kriptokoin from 2018 to 2023 and at COINTURK from 2023 to 2024. İnan made a valuable contribution to the ecosystem with his book on Bitcoin, "Bitcoin Sen Bizim Her Şeyimizsin" (Bitcoin, You Are Our Everything). Alongside his academic background, his regular analyses, news and commentary have made him one of the well-known names in cryptocurrency journalism in Turkey. İnan continues his work as a writer and educator and remains a prominent expert voice in the cryptocurrency field.
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