The U.S. House of Representatives has passed a bill aimed at tightening trading rules for lawmakers by restricting their ability to buy publicly traded stocks. The legislation, dubbed the Stop Insider Trading Act, passed the chamber on a 232-198 vote on Wednesday and now moves to the Senate for consideration.

The sponsor, Republican Representative Bryan Steil of Wisconsin, argues the measure would reduce incentives to profit from nonpublic information. Speaking on the House floor after the vote, Steil said the bill would “ensure no lawmaker can profit off of insider information” and would introduce “strict penalties” for violations.

Key takeaways

The House approved the Stop Insider Trading Act by a 232-198 vote, sending it to the Senate after Wednesday’s passage.
Under the bill, members of Congress, along with their spouses and dependent children, would be prohibited from purchasing publicly traded stocks.
Steil outlined penalties including fines equal to $2,000 or 10% of the transaction value, plus disgorgement of profits.
Critics— including Senator Elizabeth Warren—argue the bill is insufficient because lawmakers could still keep and sell stocks they already own.
The vote comes as Senate discussions continue over a separate crypto-focused bill, the Digital Asset Market Clarity Act, which addresses broader restrictions on public officials.

What the Stop Insider Trading Act would change

According to the bill’s sponsor, the Stop Insider Trading Act targets the core conflict that arises when public officials participate in markets while possessing information that is not available to the general public. In Steil’s remarks, he emphasized that the legislation is designed to block new stock purchases by lawmakers and their immediate family members.

Steil also described the enforcement approach for alleged violations. As he stated on the House floor, the bill includes a fine equal to $2,000 or 10% of the transaction, along with disgorgement of profits. He further indicated that violators could forfeit any gain realized if they fail to comply.

One operational feature highlighted by Steil is a notice requirement tied to pre-existing holdings. While the bill would prohibit stock purchases, Steil said members of Congress would have to give seven days’ notice before selling stocks they already own, a rule he presented as a deterrent against insider trading.

Where Democrats say the bill falls short

Even with the House’s approval, some Democrats argue the legislation does not fully solve the problem of conflicts of interest. The main critique is that the measure would not require lawmakers to divest current holdings, potentially leaving room for market-sensitive actions based on nonpublic developments.

Senator Elizabeth Warren said on Thursday that the bill contains “major loopholes.” In her view, because lawmakers could continue owning and selling stocks already held, it “won’t solve the problem,” and she said the approach is unlikely to gain traction in the Senate. Warren’s position, as summarized in her comments, is that members of Congress should not own, buy, or sell stocks at all.

How it compares with broader Senate ethics proposals

The Stop Insider Trading Act is narrower than other policy efforts currently discussed in Congress. Unlike the proposed text for the Digital Asset Market Clarity Act—a Senate consideration focusing on cryptocurrency market structure—Steil’s bill is limited to investment restrictions for members of Congress. It does not extend the same coverage to the president or vice president and their families.

In earlier coverage of the Digital Asset Market Clarity Act, the discussion has included restrictions on public officials’ token activity. As described in connection with that measure, it would bar U.S. public officials from issuing or sponsoring tokens until 2029.

For crypto investors and builders, the difference matters because it reflects how lawmakers are calibrating ethics and restrictions across sectors. While the insider trading bill targets traditional markets and elected officials’ stock activity, the parallel crypto legislation is framed around market structure and digital-asset involvement by officials. Observers will be watching whether ethics-style restrictions expand beyond stocks—or remain compartmentalized by policy area—as the Senate considers each track.

From Congress trading to prediction markets

The House vote on the Stop Insider Trading Act followed Steil’s sponsorship of related legislation aimed at trading behavior on prediction market platforms. As noted in earlier developments, Steil previously backed the Stop Lawmakers from Predicting Act, introduced in June to prevent certain public officials, their spouses, and children from “wagering on public policy issues and political outcomes.”

Prediction markets have drawn renewed attention after high-profile reports of individuals allegedly placing large bets tied to real-world political events. Cointelegraph previously covered an incident involving a soldier accused of placing more than $400,000 in bets on Kalshi and Polymarket outcomes related to Venezuela President Nicolás Maduro, who was removed by U.S. forces in January. Earlier reporting also described claims that Donald Trump’s teleprompter operator made more than $100,000 in bets on Kalshi event contracts connected to phrases used in the president’s speeches.

Steil’s prediction-market legislation proposed a penalty structure similar to the stock trading proposal: violators would pay a $2,000 fee or 10% of the value of prohibited bets placed on the platforms. The similarity suggests a consistent legislative framework in Steil’s approach—using fines and disgorgement mechanics to reduce incentives for wagering or trading based on privileged information.

What happens next in the Senate

With the Stop Insider Trading Act now in the Senate, the immediate question is whether lawmakers will narrow the enforcement focus or widen the restrictions to address the objections raised by critics. For readers following the intersection of governance and markets—whether traditional equities or crypto-related policy—attention should shift to whether the Senate modifies the House bill to limit not only new purchases, but also ownership and sales of existing holdings.