Prediction markets are exploding in popularity as people rush to bet on real-world events, from sports to elections to celebrity behavior. The platforms, however, have also tempted individuals to make a quick buck from insider information. The latest example came on Wednesday when Kalshi announced it had closed investigations into two cases of insider trading, including one that targeted a MrBeast employee named Artem Kaptur who made over $5,000 on bets related to YouTube streaming milestones.
The second investigation targeted a long-shot candidate for California governor in violation of Kalshi’s rules for politicians. In a salty tweet sharing news of the investigations, Kalshi cofounder Luana Lopes Lara, using a variation of a popular crude expression, said the pair, “F—ed around, found out.”Kalshi also suspended Kaptur for two years and imposed a penalty of $20,397.58, using a power granted by the Commodity Futures Trading Commission for exchanges to impose fines on customers. In the case of the gubernatorial candidate, described as a Nazi sympathizer by a Catholic publication, Kalshi imposed a five-year ban and a $2,246.36 fine.Kalshi, which said it plans to donate the fines to a nonprofit that provides education about derivatives, also announced it has opened 200 insider-trading investigations in the past year, and frozen numerous accounts.
