Members of the US Congress have agreed to restrict their own access to the stock market. The Stop Insider Trading Act was passed by the US House of Representatives in a 232-198 vote on Wednesday, July 22, 2026. Sponsored by Wisconsin Republican Representative Bryan Steil, the legislation prohibits all lawmakers, their spouses, and dependent children from purchasing shares in publicly traded companies.
The bill now awaits a vote in the Senate. However, the legislation is set to face internal pushback due to a major loophole in its original draft.
Existing Portfolio Loophole
The bill only halts purchases of new assets. Stocks already held in lawmakers’ portfolios before the bill’s enactment can still be held or sold on the open market. Liquidation rules remain lenient: politicians are only required to disclose planned sales publicly 7 to 14 days prior to execution through the Clerk of the House or Secretary of the Senate.
Violators face fines of $2,000 or 10% of the investment value, whichever is higher. These administrative penalties apply alongside the mandatory forfeiture of all profits generated from illicit transactions.
This grandfathering of existing assets drew fierce backlash from Senator Elizabeth Warren. A vocal critic of Capitol Hill conflicts of interest, Warren argued that the exemption guts the bill’s core purpose. “This bill has a giant loophole,” Warren said in response to the House vote. “Members of Congress can still own and sell stock - it doesn’t solve the problem. It won’t pass the Senate.”
Warren called for a comprehensive ban: lawmakers in Washington should be barred entirely from owning, buying, or selling stocks. Compared to the draft CLARITY Act, Steil’s bill also narrows in scope by exempting the president, vice president, and their immediate family members from the ban.
Cracking Down on Prediction Market Bets
Beyond traditional equities, Steil’s legislative push extends to digital betting markets. He introduced a separate proposal barring lawmakers from wagering funds on prediction market platforms, including major venues like Kalshi and Polymarket.
The measure comes in response to two recent high-profile insider information incidents. In one case, a service member allegedly profited over $400,000 on Polymarket contracts regarding Venezuelan President Nicolas Maduro’s status, tied directly to planned US troop movements. Separately, a teleprompter operator for Donald Trump reportedly pocketed $90,000 by betting on specific words used during a speech.
A Test for Insiders
Both betting incidents highlight how easily financial instruments can be monetized by those with proximity to key decision-makers. With opposition mounting from Warren’s camp in the Senate, Steil’s legislative journey reflects an enduring reality: untangling money from lawmakers remains a heavily politicized compromise.
Source: crypto.news.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
