Kalshi Reports Suspicions of Insider Trading to U.S. Authorities
The Kalshi prediction markets platform has begun more actively reporting information to U.S. federal agencies about potential trading violations, including the possible use of insider information. The company told Fortune that its systems monitor suspicious activity, and data on all trades is reported daily to the U.S. Commodity Futures Trading Commission (CFTC).
Kalshi stated that the platform’s rules prohibit market manipulation and insider trading. Before trading begins, users must undergo identity verification, and the company’s systems analyze transactions for potential violations.
Earlier this year, Kalshi’s systems detected trades by former Congressman George Santos related to the markets surrounding the U.S. president’s State of the Union address to Congress. According to the company, it investigated the matter and submitted evidence to the CFTC. Kalshi is also conducting its own enforcement proceedings regarding Santos’s possible violation of exchange rules. If monetary penalties are imposed, the platform plans to work toward compensating any traders who may have been affected.
Federal authorities also examined the trading activity of Gabriel Perez, a former White House teleprompter operator. Officials were checking whether he could have used advance knowledge of Donald Trump’s prepared speeches to trade Kalshi contracts on words or topics expected to appear in the president’s speeches.
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A study by Columbia University law professor Joshua Mitts and Haifa University law professor Moran Ofir found that the percentage of winning bets on prediction markets was nearly 70%, which significantly exceeds a random result. The authors estimated traders’ profits at $143 million.
Amid the debate over insider information, the Trump family is expanding its presence in this sector. Trump Media & Technology Group is developing the TruthPredict platform for trading contracts on significant events and key milestones. The company has also launched the premium Truth API service, which provides Wall Street with fast, machine-readable access to Truth Social posts, including those by Donald Trump.
Donald Trump Jr. is a paid strategic advisor to Kalshi. His venture capital firm, 1789 Capital, has invested in Kalshi’s competitor, Polymarket, and last year he joined Polymarket’s advisory board. According to Fortune, there is no public evidence that Trump Jr. used privileged government information to trade on these platforms.
