Admin Rolls Back Oversight, Donald Trump, Jr. Cashes In
NEWS & RESEARCH
In January 2025, Donald Trump, Jr. became an advisor to Kalshi, a prediction-market company. Shortly after his 2025 inauguration, President Donald Trump’s administration reduced the staff of the Commodity Futures Trading Commission (CFTC), the federal agency charged with regulating prediction markets and certain crypto markets, from 760 employees to about 550. According to the New York Times, CFTC officials who raised concerns about crypto firms were placed on leave, investigated, demoted, or departed the agency. Not long afterward, another Donald Trump, Jr. company, 1789 Capital, became heavily involved in cryptocurrency and prediction markets, and Trump Media announced plans to invest roughly $2.5 billion in bitcoin as part of its partnership with Crypto.com.
SOURCES: New York Times | Axios | Reuters | ProPublica
ANALYSIS & OPINION
The Trump administration’s cuts to the CFTC brought the agency to its lowest staffing levels since the 2008 financial crisis. Many financial watchdogs worry that the reduced oversight is highly dangerous. Most crypto firms are not required to provide audited financial statements, detailed risk disclosures, or regular reporting. Additionally, prediction markets are particularly vulnerable to insider trading by government actors because participants could potentially use classified or other secret information to profit from events like military strikes and tariffs. Despite these concerns, CFTC enforcement has dropped sharply since the reduction in staff. Thus far, the agency has brought just two crypto enforcement cases during the second Trump term. By comparison, the CFTC had more than 80 enforcement actions during the Biden Administration and nearly 25 during Trump’s first presidency.
SOURCES: New York Times | Bloomberg Law | Project on Government Oversight | Cornerstone Research | Better Markets
HOW TO FIX IT
Federal action:
Pass the STOP Corrupt Bets Act, sponsored by Sen. Jeff Merkley (D-OR) and Rep. Jamie Raskin (D-MD), would ban prediction market activity involving politics, military affairs, and sports to prevent insider trading and manipulation by those with nonpublic information.
The House should adopt a rule banning its members from participating in prediction markets. Rep. Ashley Hinson (R-IA) recently introduced such a measure. (The Senate recently passed its own rules preventing senators and Senate employees from trading on prediction markets.)
Legislation: H.R.8123 - STOP Corrupt Bets Act of 2026
