Congress Can Keep Their Stocks, But Maybe Not Their Kalshi Bets 📈

The US House of Representatives passed the Stop Insider Trading Act on Wednesday in a 232-198 vote, sending the legislation to the Senate, which received it for consideration on Thursday. The bill, sponsored by Wisconsin Representative Bryan Steil, would prohibit members of Congress, their spouses and dependent children from purchasing publicly traded stocks and would require seven days' notice before selling assets they already hold. Penalties would include a fine equal to $2,000 or 10% of the transaction, plus disgorgement of profits.

Steil, speaking from the House floor on Wednesday, said the legislation "ensures no lawmaker can profit off of insider information" and "institutes strict penalties for any violation." He added: "We have not had a bill on the House floor on this topic with this opportunity before." Steil further described the penalties as "a fine equal to $2,000 or 10% of the transaction, as well as a disgorgement of profits. Violators would be forfeiting any gain realized if they failed to comply with this legislation."

Senator Elizabeth Warren criticized the measure on Thursday, saying "[the] bill has major loopholes." Warren stated: "Lawmakers can continue owning and selling stocks — so it won't solve the problem. Not gonna fly in the Senate. Members of Congress should not own, buy, or sell stocks." Unlike the proposed text for the Digital Asset Market Clarity Act, a cryptocurrency market structure bill under consideration in the Senate that could bar all US public officials from issuing or sponsoring tokens until 2029, Steil's bill was limited to members of Congress and did not include the president or vice president and their families.

Separately, Steil introduced the Stop Lawmakers from Predicting Act in June to prevent certain public officials, their spouses and children from "wagering on public policy issues and political outcomes" on prediction market platforms such as Kalshi and Polymarket. Prediction markets drew scrutiny after a soldier allegedly made more than $400,000 betting on the removal of Venezuela President Nicolás Maduro by US forces in January, and after Donald Trump's teleprompter operator reportedly made more than $100,000 betting on Kalshi event contracts tied to words and phrases in the president's speeches.