A prominent U.S. congressman is making moves to crackdown on insider trading activities within prediction markets. The proposed measure aims to establish criminal penalties for those engaging in unfair trading practices on these platforms.

Prediction markets have gained traction in the crypto space as they allow users to speculate on outcomes of real-world events. However, concerns about market manipulation and insider trading have surfaced as these platforms grow in popularity and trading volume.

This legislative push reflects broader scrutiny of the prediction market sector, particularly around ensuring fair market practices and protecting retail participants from sophisticated traders with access to privileged information. The move signals ongoing efforts by policymakers to establish clearer regulatory frameworks around emerging financial instruments in the digital asset space.