HISTORIC DECISION IN THE US: BAN ON PREDICTION MARKETS FOR CONGRESS MEMBERS AND STAFF

In the United States, lawmakers have pushed for a new ban that will prevent them and their staff from trading on prediction market platforms such as Kalshi and Polymarket. This move is a direct result of growing concerns and recent scandals that have allowed officials with access to sensitive information to profit unfairly.

The Foundations and Scope of the Historic Ban

🔹 Unanimous Approval and Immediate Effect: The US Senate unanimously approved a rule change banning senators and their staff from trading on prediction markets on April 30, 2026. Introduced by Ohio Republican Senator Bernie Moreno, this change to the Senate's rules of procedure took effect immediately without requiring the president's signature.

🔹 Details and Limitations of the Ban: The new regulation prohibits senators from entering into "any agreement, contract, or transaction that provides for a purchase, sale, payment, or delivery contingent upon the occurrence, non-occurrence, or degree to which a particular event occurs." This statement directly targets event contracts on platforms like Polymarket and Kalshi. While the decision currently only covers 535 senators and thousands of congressional staff, members of the House of Representatives and executive branch employees are not yet included. The Senate Ethics Committee will be responsible for enforcing the ban.

The Chain of Scandals Behind the Ban

This historic ban cannot be understood without considering the series of scandals that erupted regarding the use of insider information in speculation markets, posing a national security risk.

🔹 Venezuela Operation and Military Intelligence Scandal: U.S. Army Special Forces Staff Sergeant Gannon Ken Van Dyke is accused of using classified information on Polymarket to conduct transactions related to a secret military operation that would result in the capture of Venezuelan President Nicolás Maduro in January 2026. Van Dyke allegedly made over $400,000 in profits by betting approximately $33,000 and faces charges carrying a potential sentence of up to 60 years in prison.

🔹 Iran Attacks and Suspiciously Timed Bets: According to CNN and Associated Press reports, hours before a surprise attack on Iran by the U.S. and Israel in February 2026, at least 16 accounts placed heavy bets on Iran-related markets, profiting hundreds of thousands of dollars immediately after the attack. Similar suspicious bets were detected in March, just minutes before a ceasefire was declared.

🔹 Kalshi's Internal Audit Raid: On April 22, 2026, Kalshi penalized a Senate candidate and two House of Representatives candidates for betting on their own election campaigns on its platform. This incident highlighted the inadequacy of the platforms' internal audit mechanisms.

2026: The Year of Regulation for Prediction Markets

This Senate ban is just one link in a much broader wave of regulation targeting prediction markets in 2026. Since the beginning of the year, more than 10 bills related to prediction markets have been introduced to Congress, aiming to radically change the industry's rules.

🔹 Prediction Market Act of 2026: Introduced by Senators Kirsten Gillibrand and Dave McCormick, this comprehensive bill would completely ban members of Congress, the president, and senior executive officials from trading on prediction markets, impose strict standards for protecting customer funds, and include consumer protection measures such as mandatory age verification for users under 18.

🔹 STOP Corrupt Bets Act: Led by Representative Jamie Raskin and Senator Jeff Merkley, this legislation goes even further, aiming to completely ban betting on elections, government actions, sporting events, and military operations.

🔹 Parallelism with Congressional Stock Trading Ban: This regulatory move runs in full parallel with broader efforts, gaining momentum since early 2026, to ban members of Congress from trading on the stock market.
Market Reaction and the Future of the Sector

🔹 Full Support from Platforms: Kalshi CEO Tarek Mansour and Polymarket announced their full support for the Senate's move. Mansour, noting that Kalshi already blocks members of Congress from its platform, called for the Senate to pass the same measure in the House of Representatives.

🔹 Historic Market Valuation Peaks: Interestingly, despite all this regulatory pressure, Kalshi reached a valuation of $22 billion in its latest funding round, while Polymarket rose to $15 billion with a $600 million investment from ICE. This shows that regulation is not entirely negative for the sector, but rather a catalyst for institutionalization and gaining legitimacy.

Conclusion and Strategic Assessment for the Crypto Ecosystem

This wave of bans on prediction markets represents a turning point for crypto and blockchain-based platforms. On the one hand, it is clear that regulatory pressure will increase, especially for decentralized and offshore platforms like Polymarket. On the other hand, as in the Kalshi case, it is likely that CFTC-approved platforms will become even stronger and institutional adoption will accelerate. This self-imposed ban by the US Congress is actually the strongest evidence yet that prediction markets are no longer a "niche" but an integral part of the global financial system.

💡 "Where there is no transparency, there is no market, only gambling. The real winners are not those closest to the information, but those most faithful to the rules."

⚠️ Don't Forget to mark Stoploss and manage risk properly.
👉NFA
👉DYOR
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