The Revolving Door Project, a Prospect partner, scrutinizes the executive branch and presidential power. Follow them at therevolvingdoorproject.org.
In February 2024, former Rep. Sean Patrick Maloney (D-NY), then-nominee for U.S. representative to the Organisation for Economic Co-operation and Development (OECD), faced pointed questions in a Senate hearing about his ties to cryptocurrency companies, and how that might affect his decision-making in his new role. Under pressure from Sen. Elizabeth Warren (and the Prospect), Maloney agreed to immediately resign from his private-sector work with cryptocurrency firms and commit to “not accept employment, board service or compensation from any crypto company or organization for four years after his OECD tenure.”
Tuesday morning, just one year after leaving the OECD, Maloney announced a new position that appears to violate this commitment. He will now be the president and CEO of the Coalition for Prediction Markets (CPM), an industry trade and lobbying group for the so-called prediction market industry. Among the group’s five “members” that fund the operation are Crypto.com and Coinbase, the latter being the very same cryptocurrency company that inspired Maloney’s ethics pledge to begin with.
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A former chair of the Democratic Congressional Campaign Committee (DCCC), Maloney was once viewed as one of the party’s rising stars, leading the House Democratic caucus’s campaign arm, a position that often serves as a stepping stone to higher positions in House leadership. But in 2022, Maloney lost re-election in a New York district that Joe Biden had won by double digits just two years before, despite Democrats fighting the GOP nearly to a draw across the rest of the country. His loss, attributed by some to his alienation of local Democratic groups and taking a European fundraising trip just weeks before Election Day, was considered by election analysts as one of the most shocking upsets of the midterms.
The next May, just four months after being pushed out of office, Maloney turned that insider cachet into a job with the world’s largest cryptocurrency exchange, Coinbase. Maloney was not forced to settle for mere private-sector employment for long, as the former congressman was tapped by President Biden to represent the U.S. at the OECD—on the very same day that Coinbase announced his role on their “Global Advisory Council.” In his role as the U.S. representative to the OECD, Maloney would be given the rank of ambassador, and be sent to Paris to represent the nation at the international body, which, among other things, happened to be working on developing regulatory frameworks pertaining to the cryptocurrency industry.
Given the OECD’s reliance on consensus (meaning no objections by any member states or their respective representatives), Maloney’s inclusion, as an active adviser to a cryptocurrency firm, raised eyebrows with crypto skeptics like Sen. Warren. But Maloney’s subsequent resignation from Coinbase and his strong ethics pledge seemed to quiet his detractors. He was confirmed by the Senate the following month, with Sen. Warren voting yea in light of his seemingly strong ethics pledge.
But the former DCCC chair appears to be fed up with this restriction just one year into his self-imposed four-year ban on work with cryptocurrency firms. On Tuesday, just a week after telling Axios he was passing on the chance to run again for Congress, Maloney announced he had taken the position running CPM.
This lobbying organization was launched in early December 2025 to help push back against state-level regulation of online prediction markets, and to prevent attempts by lawmakers to rein in the industry’s rapid growth. Since being de facto legalized with the Trump takeover of the Commodity Futures Trading Commission (a policy change no doubt sped along by the Trump sons’ investments with and employment by prediction markets), the industry has exploded. The markets function similarly to gambling, allowing people to make bets on the outcome of events ranging from NFL games to elections and even the weather. But they are, for the sake of regulation, event contracts, a form of swaps.
The prediction market industry is built on cryptocurrency, with websites like Polymarket using cryptocurrency-denominated trading as a means of evading regulatory oversight while using the same blockchain-based anonymized trading systems designed to frustrate regulatory scrutiny for things like insider trading. The industry has also embraced the cryptocurrency ethos of claiming exemption from existing regulations on the basis of technological innovation, and embracing the relatively weak CFTC and its industry-captured leadership as a Potemkin regulator. In December, Coinbase announced a partnership with the prediction market firm Kalshi (which VC firm A16Z considers a crypto firm) to allow prediction markets trading on the crypto platform, while Crypto.com announced plans to do the same with other partners just days before. Now they’ve joined forces to lobby Washington, with Maloney as their chief spokesperson.
Maloney’s new job will surely involve attempting to prevent any regulation of these gambling platforms at the state level, and engaging in a public relations campaign to pretend they are respectable financial institutions. He’s already starred in a knockoff Zohran Mamdani–style campaign ad for CPM, claiming that prediction markets allow everyday people to hedge risk, and that they’re under assault by powerful interests looking to screw over working people. And in the post announcing his new role, Maloney claimed that prediction markets are crucial to offering better insight into political outcomes than polls, pundits, or social media.
At bottom, however, prediction markets just are gambling, and perhaps the worst form of gambling ever invented. By allowing participants “to financialize everything and create a tradable asset out of any difference in opinion,” as Kalshi CEO Tarek Mansour put it, they first greatly incentivize insider trading, which is absolutely rampant—in fact, part of the sales pitch. If insiders are making trades, the argument goes, that will be reflected in the market price. In reality, this almost never happens; instead, people with nonpublic knowledge make big bets moments before the contract is up, thereby providing little or no useful information but ripping off gambling addicts to the tune of thousands or millions of dollars. And when these addicts lose, they will not be the only ones harmed. So too will their families, who will feel the loss of income, and statistically be more likely to suffer from domestic violence.
Worse still, prediction markets incentivize people to rig the bet themselves by taking action, including serious crimes. We have already seen people attempting to rig contracts by throwing dildos onto the court in a WNBA game, but much worse can be imagined. Was the decision to kidnap Venezuelan President Nicolás Maduro influenced by whoever it was that made $410,000 betting it would happen? It would not be surprising to learn that was the case! And the logical end point is that any market about whether a person will do something is, by definition, an assassination bounty.
In a way, this is genuine crypto innovation—while traditional cryptocurrencies are only genuinely useful for providing financial services to existing terrorists, drug cartels, and human traffickers, prediction markets have set the stage for a whole new generation of criminals and novel crimes.
Attempting to put lipstick on this pig is a tall order. Luckily, Maloney will not be working alone, as former House Financial Services chairman Rep. Patrick McHenry (R-NC) will also be joining the Coalition for Predictions Markets as a senior adviser. This will be at least McHenry’s fifth position as a “senior adviser” since leaving office last January, in addition to the former congressman’s other roles in private industry.
Clearly, Maloney does not view working for a cryptocurrency-backed entity as a violation of his commitment to “not accept employment, board service, or compensation from any company or organization primarily engaged within the cryptocurrency or digital assets industry.” Working for CPM cannot help but be a violation of this pledge—these betting contracts simply are digital assets; even the industry agrees on that—but even if we grant his position for the sake of argument, it still blows a massive hole in any ethical promise. How can any such statement be trusted if an industry merely needs to spin up a corporate intermediary in order to employ someone who would otherwise be barred from working on their behalf? If future nominees pledge to not work for a given industry, will they do so knowing this Maloney exception will be available to them?
In her speech this week on the future of the Democratic Party, Sen. Warren condemned former Arizona Sen. Kyrsten Sinema for blocking progressive legislation and selling out to big business interests upon leaving office—including the very same Coinbase Global Advisory Council for which Maloney once worked. To Warren, this behavior undermines voter confidence in the party and signals the party’s willingness to act on behalf of moneyed interests. It is difficult to see how Maloney’s new role is substantively different from Sinema’s behavior.