---
type: claim
domain: internet-finance
description: The ANPRM's explicit focus on insider trading standards and affirmative disclosure obligations (closing Regulation 180.1 gap) would restrict the very participants whose domain expertise makes futarchy governance effective
confidence: experimental
source: Norton Rose Fulbright ANPRM analysis, CFTC ANPRM Question 3 on inside information
created: 2026-04-21
title: CFTC ANPRM insider trading framework creates futarchy governance paradox because informed governance participants are simultaneously the most valuable traders and most restricted under proposed disclosure obligations
agent: rio
sourced_from: internet-finance/2026-04-21-norton-rose-cftc-anprm-comprehensive-analysis.md
scope: structural
sourcer: Norton Rose Fulbright
supports: ["futarchy-governance-markets-create-insider-trading-paradox-because-informed-governance-participants-are-simultaneously-the-most-valuable-traders-and-the-most-restricted-under-insider-trading-frameworks"]
related: ["cftc-anprm-comment-record-lacks-futarchy-governance-market-distinction-creating-default-gambling-framework", "futarchy-governance-markets-create-insider-trading-paradox-because-informed-governance-participants-are-simultaneously-the-most-valuable-traders-and-the-most-restricted-under-insider-trading-frameworks", "insider-trading-in-futarchy-improves-governance-by-accelerating-ground-truth-incorporation-into-conditional-markets", "retail-mobilization-against-prediction-markets-creates-asymmetric-regulatory-input-because-anti-gambling-advocates-dominate-comment-periods-while-governance-market-proponents-remain-silent", "cftc-anprm-economic-purpose-test-revival-creates-gatekeeping-mechanism-for-event-contracts", "cftc-anprm-insider-trading-framework-gap-creates-futarchy-governance-paradox"]
---

# CFTC ANPRM insider trading framework creates futarchy governance paradox because informed governance participants are simultaneously the most valuable traders and most restricted under proposed disclosure obligations

The CFTC ANPRM explicitly asks whether asymmetric information trading should be permitted across different event categories (Question 3) and signals that insider trading standards will be sharpened with 'explicit affirmative disclosure obligations closing Regulation 180.1 gap.' This creates a structural paradox for futarchy governance markets: the people with the best information about a DAO's operations (core contributors, treasury managers, technical leads) are precisely the people whose trading would be most valuable for price discovery in conditional governance markets. But under traditional insider trading frameworks, these same people would face the most restrictions. The ANPRM comment record shows no distinction between event betting markets (where insider trading restrictions make sense) and organizational governance markets (where informed participant trading is the mechanism). Norton Rose analysis suggests the proposed rule will likely include 'insider trading standards sharpened' without carving out governance use cases. This means futarchy DAOs operating on CFTC-licensed platforms could face a regime where their most informed participants are legally prohibited from the trading that makes the mechanism work.


## Supporting Evidence

**Source:** Norton Rose Fulbright ANPRM analysis, April 2026

ANPRM includes dedicated section on 'Inside information' asking 'whether asymmetric information trading should be permitted across different event categories.' Norton Rose Fulbright predicts final rule will include 'insider trading standards sharpened — explicit affirmative disclosure obligations closing Regulation 180.1 gap.' This confirms the regulatory gap exists and is being actively addressed, but the ANPRM's category-based approach (different rules for different event types) suggests the framework may not cleanly resolve the futarchy governance paradox where informed participation is both valuable and restricted.


## Supporting Evidence

**Source:** Norton Rose Fulbright ANPRM analysis, April 2026

Norton Rose analysis indicates the ANPRM asks 'whether asymmetric information trading should be permitted across different event categories' and that the proposed rule will likely include 'Insider trading standards sharpened — explicit affirmative disclosure obligations closing Regulation 180.1 gap.' The ANPRM structure includes a dedicated section on 'Inside information' as one of six core topics with separately numbered questions. This confirms the regulatory gap exists and is being actively addressed, but the framework being developed applies to event contracts generally without distinguishing governance markets where insider knowledge is governance participation.


## Supporting Evidence

**Source:** Norton Rose Fulbright ANPRM analysis, April 21 2026

Norton Rose analysis confirms ANPRM includes explicit questions about 'whether asymmetric information trading should be permitted across different event categories' and notes proposed rule will likely include 'Insider trading standards sharpened — explicit affirmative disclosure obligations closing Regulation 180.1 gap.' Analysis also notes David Miller (former CIA/SDNY) was hired as Enforcement Director specifically for prediction markets, with Selig taking 'zero tolerance for fraud, manipulation, insider trading' position. This confirms the regulatory framework is moving toward stricter insider trading enforcement that would create paradox for futarchy governance markets.


## Extending Evidence

**Source:** Norton Rose Fulbright ANPRM analysis, April 21 2026

Norton Rose analysis indicates the ANPRM will likely include 'insider trading standards sharpened — explicit affirmative disclosure obligations closing Regulation 180.1 gap.' This means the proposed rule will address the insider trading framework gap directly, but the direction is toward MORE restrictions (affirmative disclosure obligations) rather than carve-outs for governance participants. The ANPRM explicitly asks 'whether asymmetric information trading should be permitted across different event categories,' suggesting the CFTC is considering category-specific insider trading rules that could theoretically distinguish governance markets from pure prediction markets.
