Kalshi froze two high-profile accounts and penalized the users for trade violations.
In an effort to be forthcoming about its rules and insider trading stance, the prediction market platform announced Wednesday that a California politician and an employee of a popular YouTube account violated the company’s policies.
Key Takeaways
- A former California governor candidate received a five-year ban from Kalshi and a financial penalty for trading on himself.
- An editor for MrBeast was also punished for violating Kalshi’s insider information policy.
- Kalshi is making an effort to inform users about rule-breaking.
“In the past year, we’ve opened 200 investigations and frozen a number of flagged accounts. Of those investigations, over a dozen have become active cases,” Kalshi stated in its release. “We’ve received questions from customers about how we identify violations and enforce our rules. So, we’re releasing information about two insider trading cases we’ve recently closed.”
Kalshi said there was clear evidence during the investigations that rules were broken, and neither of the violators was able to withdraw profits from those trades. The announced penalties were not indicative of future infractions.
Enjoying Covers content? Add us as a preferred source on your Google account“We’ve reported each of these cases to the CFTC, as we are required to do, and Kalshi will be donating the fines imposed to a non-profit that provides consumer education on derivatives markets,” the company said.
Not on yourself
The first case involved Kyle Langford. In May 2025, Langford purchased nearly $200 worth of contracts on his governor candidacy. Langford publicly posted on X that he put down $100 on himself with odds of 6% and included a screenshot video of the trade.
The prediction market company handed him a five-year ban from using the platform and issued Langford a financial penalty of 10 times his trade.
“In May, our Surveillance Department saw an online video by a candidate for Governor of California that appeared to show him trading on his own candidacy,” Kalshi said in its report. “We immediately froze his account and opened an investigation. The candidate was initially cooperative and acknowledged that this violated the exchange rules. As a candidate in a race, you can (and probably should) follow and use Kalshi’s market forecast, but you should not trade on it.”
Langford dropped out of the gubernatorial race and is now running for Congress in California.
Insider info gets you banned
Kalshi identified the second violator as Artem Kaptur, an editor for YouTube sensation MrBeast. The individual used inside information to trade about $4,000 on streaming markets, a violation of the platform's policy on using nonpublic information to trade.
Kaptur received a two-year ban from Kalshi and a penalty of five times his initial trade size, which amounts to around $20,000.
“Our surveillance systems flagged his near-perfect trading success on markets with low odds, which were statistically anomalous,” Kalshi said. “At the same time, because all trading data is publicly available, a number of Kalshi users sent us tips about unusual activities they saw in the trading data. We investigated and found that the trader was employed as an editor for the streamer’s show and likely had access to material non-public information connected to his trading.”
Cracking down
Insider information trades have become a significant concern in the prediction market industry in recent months.
A staff member at a U.S. think tank was fired for manipulating a map used to determine a Polymarket trading on the war between Russia and Ukraine. There was also a trade on the capture of Nicolas Maduro, which raised suspicions from lawmakers.
Kalshi, which has reportedly generated nearly $43 billion in trading volume, hinted this week that it would begin publicly disclosing more information on its enforcement of trading violations.
“No system is perfect,” Kalshi stated. “No financial exchange is immune from bad actors. Not stock exchanges, not banks, not prediction markets. We’re committed to deterring and finding the bad actors, manipulators, and those who willingly cheat.”
The CFTC acknowledged Kalshi's handling of these matters, but also noted that it has “full authority to police illegal trading practices” occurring on designated contract markets.
