Screens 93,000 Polymarket markets and flags traders with a 69.9% win rate, more than 60 standard deviations above chance, estimating $143 million in anomalous profits. Documents specific cases from geopolitical events to celebrity announcements where wallets appear to trade on material non-public information. Proposes a regulatory framework combining platform-level registration, contract-level restrictions on high-risk categories, and an extended misappropriation doctrine to close the legal gaps that leave prediction market insider trading largely unpoliced.

Congressional Research Service legal sidebar analyzing whether and how insider trading law applies to prediction markets. Walks through SEC Rule 10b-5, CFTC Rule 180.1, the STOCK Act, and Title 18 criminal statutes, then examines the CFTC's February 2026 advisory on two Kalshi enforcement actions. Identifies the core gap: existing law requires breach of a duty, but many prediction market insiders (e.g., a political candidate betting on his own race) may not owe one. Surveys four pending bills in the 119th Congress that would close this gap in different ways.

Documents a pattern of insider trading on prediction markets, from wallets that profited $1.2 million on the timing of US strikes on Iran to trades linked to classified intelligence. Compares how Kalshi's KYC-based surveillance and Polymarket's pseudonymous blockchain create different enforcement challenges. Argues platforms should reconsider contract offerings before regulators act.

Examines how to distinguish wash trading from legitimate market making on Polymarket using network analysis. Wash traders exhibit homophily, trading only within their collusive group, while market makers trade indiscriminately with diverse counterparties. Describes an algorithm developed by Columbia researchers that identified a cluster of 200 wallets generating $113 million in volume with just $57.86 in aggregate losses.