U.S. to ban insiders from crypto prediction markets as PREDICT Act filed

U.S. regulators and lawmakers are escalating oversight of crypto prediction markets on March 25, introducing bipartisan bills aimed at preventing U.S. officials from trading political and policy outcome contracts—often routed through Polymarket and Kalshi. In Massachusetts, Rep. Seth Moulton announced an office-wide ban for his staff. They are barred from trading or holding positions in crypto prediction markets tied to elections, wars, geopolitical events, or information learned via their official roles. The press release frames this as an ethics step to curb “corrupt insiders.” In Nebraska, Rep. Adrian Smith and Rep. Nikki Budzinski introduced the PREDICT Act (Preventing Real-time Exploitation and Deceptive Insider Congressional Trading Act). It would prohibit members of Congress, the President/Vice President, spouses/children, and senior political appointees from trading crypto prediction markets. Penalties include a civil fine equal to 10% of the banned trade’s value, and profits would be sent to the U.S. Treasury. Lawmakers cited reports of lesser-known traders reportedly earning large gains linked to war-related outcomes and government shutdown duration, reinforcing concerns about non-public information leaking into crypto prediction markets. For crypto traders, the direct effect on BTC is limited, but the regulatory overhang is likely to increase compliance pressure (tighter KYC/monitoring) and political headline risk around event-driven “alternative market” products. BTC slipped slightly from about $71k to around $69k at the time of reporting.