On March 31, 2026, CFTC Director of Enforcement David I. Miller delivered remarks at NYU Law School addressing three significant developments in the CFTC’s Division of Enforcement. First, Miller announced five enforcement priority areas going forward: (i) insider trading (including in the prediction markets); (ii) market manipulation (particularly in the energy markets); (iii) market abuse/disruptive trading; (iv) retail fraud (including Ponzi schemes); and (v) willful violations of Anti-Money Laundering (“AML”) and Know-Your-Customer (“KYC”) laws and rules. Miller made clear that “[t]he era of regulation by enforcement is over,” and that under Chairman Selig’s leadership, the Division will “focus on the Division’s core purpose of policing fraud, abuse, and manipulation rather than setting policy.” Second, Miller addressed what he characterized as “a myth in the mainstream media and social media that insider trading law doesn’t apply in the prediction markets,” making clear that “insider trading violates the Commodity Exchange Act (the ‘CEA’) and our regulations’ anti-fraud provisions,” and that the Division will “aggressively detect, investigate, and, where appropriate, prosecute insider trading in the prediction markets.” Third, Miller announced that the Division “will be issuing a new cooperation policy advisory soon,” including “significant changes to our declination policy.”

Policy Announcements

I. Enforcement Priorities

Miller announced that the Division would concentrate its resources on five enforcement priority areas: insider trading, market manipulation, market abuse and disruptive trading, retail fraud, and willful AML and KYC violations. Miller framed the announcement by stating that “[t]he era of regulation by enforcement is over,” and that the Division would “relentlessly focus on serious violations, especially fraud and market manipulation.”

The first priority is insider trading, which Miller described as “illegal under the CEA and our regulations in all our markets, including the prediction markets” and carrying “serious consequences for market integrity and trust.” Because the CFTC’s markets are “price-discovery markets, not disclosure-based markets,” the Division will “only be prosecuting cases against those who tip or trade with misappropriated information,” not those who legitimately use their own knowledge to make trading decisions.

The second priority is market manipulation, which Miller described as “fundamental to a market regulator’s mission” to combat, given that “[p]roperly functioning markets are efficient, create appropriate prices for essential goods, and provide accurate price signals,” while “market manipulation can drive up costs, distort price signals, erode trust, and impose costs on consumers.” Miller identified the energy markets as a particular area of focus, characterizing manipulation there as “particularly and perhaps uniquely harmful” given “inelastic demand and limited substitutability,” and noting that “price increases in energy markets can also have broad inflationary effects because energy costs ripple through the economy.”

The third priority is market abuse and disruptive trading, including “spoofing, disruptive trading during a closing period, and wash trading,” conduct Miller described as reducing efficiency, distorting price signals, and raising prices in the same manner as outright manipulation.

The fourth priority is retail fraud. The Division will continue to target “retail fraud in its various forms, from Ponzi schemes to commodity pool frauds, pig-butchering, impersonation frauds, and ‘phishing’ attacks directed at individuals” through “a large task force dedicated to this priority,” with Miller noting that such schemes increasingly employ “AI-created images and videos, targeted communications on social media platforms, and fake websites and phone applications that duplicate the websites and apps of major banks and crypto asset firms.”

The fifth priority is willful AML and KYC violations, which Miller described as “key tools in fighting crime and protecting our markets” and “essential in combatting terrorism, narcotrafficking, fraud, and other serious illegal activity.” Miller emphasized that the Division is “not prioritizing technical violations, but rather those who willfully decide to break these essential laws,” with criminal referrals to be made as appropriate.

II. Insider Trading in the Prediction Markets

Miller announced that the Division would treat insider trading in the prediction markets as a live enforcement priority, stating that there is “a myth in the mainstream media and social media that insider trading law doesn’t apply in the prediction markets” and characterizing this view as flatly wrong. Miller described the prohibition as “not some abstract theory” but “a straightforward application of the law” and organized his remarks around the legal basis for the prohibition, its application to prediction markets, and its limits.

The legal basis rests on Section 6(c)(1) and Rule 180.1, which Miller explained “were created as part of the Dodd-Frank reforms as part of a deliberate effort to expand the CFTC’s authority” and “are explicitly modeled after Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5,” incorporating “the anti-fraud provisions, and insider trading, into the commodity, futures, and swap markets.” The applicable theory is misappropriation, under which “liability attaches when an individual: (1) possesses material non-public information; (2) misappropriates that information by trading on or tipping in breach of a duty of trust and confidence owed to the source of the information; and (3) does so with scienter,” with such trading required to be in connection with a contract for the sale or purchase of a commodity, future, or swap in interstate commerce.

As to application, Miller stated that event contracts are swaps under the broad statutory definition, meaning that “Section 6(c)(1) and Rule 180.1 prohibit insider trading in the prediction markets.” Miller cited a recent example from the Kalshi Designated Contract Market involving “an individual [who] traded a contract related to a YouTube channel while having an employment relationship with the subject of the contract” and who “appeared to have access to material non-public information related to his trades,” and flagged particular concern around “contracts based on the actions or status of a person or small group of people,” such as injury contracts, which “present both manipulation and insider trading risk.” Miller also noted that the Division would police the illegal use of government information in the prediction markets, including conduct prohibited under the STOCK Act and the so-called “Eddie Murphy Rule” under Section 4c(a)(4) of the CEA.

As to limits, Miller was clear that the prohibition “is only about misappropriated information,” and that “in our markets, you are absolutely entitled to trade on MNPI that you rightfully own,” with the Division exercising “prosecutorial discretion and not dedicate our resources to trivial cases or cases where there is no clear breach of duty.”

III. New Staff Advisory on Cooperation

Miller announced that the Division would soon issue a new Staff Advisory on Cooperation, rescinding the current policy issued in February 2025, with changes designed “to further incentivize cooperation, to simplify our approach, and, hopefully, to be fairer to the parties with which we interact.” The new policy has three key features: a revised declination framework, a new self-reporting standard, and a binary cooperation requirement.

Under the declination framework, a party that (i) self-reports, (ii) cooperates fully, and (iii) remediates fully, “including committing to ongoing reporting of violative conduct, and follows our guidelines on remediation and disgorgement,” will, “absent aggravating circumstances,” receive “a clear path to a declination,” to be issued upon completion of the party’s cooperation. Aggravating circumstances precluding eligibility include “pervasive intentional or reckless conduct by ownership or senior-most management” and “[r]ecidivist activity involving intentional or reckless conduct.”

To qualify, a party must self-report “in a prompt, timely, and good-faith fashion, even where the party needs more time to investigate, regardless of whether the CFTC already knew about the issue confidentially.” The window will close, however, where “the information is public or the party knows or suspects that there is an imminent disclosure from another source,” including “a whistleblower, a government investigation by another agency, a Self-Regulatory Organization investigation, or a press report.”

Under this policy cooperation itself will be binary, described by Miller as “[l]ike jumping into a lake; you’re either in a hundred percent or you’re out.” Full cooperation requires disclosing all relevant non-privileged information, sharing internal investigation findings without breaching privilege or work-product protections, making personnel available for interviews, preserving all records including ephemeral messages, undertaking good-faith efforts to secure documents located overseas, and continuing to report. Full remediation is also required, including analyzing the conduct, identifying and remediating root causes, implementing appropriate compliance program changes, disciplining relevant employees, providing full restitution to injured parties, and disgorging ill-gotten gains.

Implications

Miller’s remarks carry several practical implications for market participants. Most immediately, although CFTC enforcement actions have declined since the beginning of 2025, Miller suggests that companies and individuals active in CFTC-regulated markets should not assume that this trend will continue. And despite reports of significant staff attrition within the Division, Miller said the Division is actively hiring to replenish the enforcement ranks.

For prediction market participants in particular, the remarks signal a significant enforcement focus on these markets. The CFTC views insider trading in these markets as an enforcement priority, and Miller unequivocally stated the Division’s commitment to devoting significant resources to policing those markets. Those who access and trade on information obtained through employment relationships, confidentiality agreements, or government positions should treat such activity as carrying real civil and criminal risk.

The new cooperation policy creates a meaningful but time-sensitive incentive to act. Perhaps most notably, a self-report accompanied by full cooperation and remediation will now come with a presumption (absent aggravating circumstances) of a declination. This change helpfully clarifies one of the most difficult aspects of an assessment of whether to self-report, which is how an entity will be treated following any self-report. From a timing perspective, the path to a declination will close the moment information becomes public, a whistleblower comes forward, another agency opens an investigation, or a press report is published. Companies that become aware of potential violations should promptly assess whether they remain within the self-reporting window. If they do, the cooperation standard is demanding and binary: partial or selective cooperation will not suffice, and the decision to engage the Division should be made with that commitment in mind.

This post is based on a Sullivan & Cromwell LLP memorandum, “CFTC Division of Enforcement Announces Five Priority Areas, Insider Trading Framework for Prediction Markets and Revised Cooperation Policy,” dated April 1, 2026, and available here.