Published on: February 25, 2026, 04:37h.
Updated on: February 25, 2026, 04:37h.
- Prediction market operator intensifies efforts against insider trading
- One incident involved an editor for social media influencer MrBeast
- Another case related to the California gubernatorial election
Kalshi aims to assure market participants and regulatory bodies of its commitment to addressing insider trading allegations, as evidenced by the resolution of two recent cases.
One incident involved an editor associated with YouTube star MrBeast, known for his presence in the gaming community. The other case dealt with alleged insider trading in the California gubernatorial election. The MrBeast associate reportedly engaged in trading worth around $4,000 in Kalshi’s YouTube markets.
“In both instances, our system identified the trades, and our surveillance team suspended the accounts of the traders involved. No profits were withdrawn by either trader,” stated the prediction market operator. “The penalties applied are case-specific and take into account the trade amounts and the nature of the violations.”
Kalshi imposed a two-year ban and a financial penalty amounting to five times the size of the trade against the MrBeast employee.
California Not So Dreamy on Kalshi
In the second case, Kalshi suspended Kyle Langford, a Republican who previously placed bets on his own election in the California governor’s race and discussed it on social media. He has since exited the gubernatorial race to pursue a congressional seat in California’s 26th district.
“Penalty: 5-year ban and a fine of 10 times the original trade size. Note: this candidate announced he is no longer pursuing the governor’s position and is now running for Congress,” added Kalshi.
Separately, Stephen Cloobeck, a notable donor to Democratic candidates and a former contender for California’s governorship, was restricted from trading event contracts related to California’s gubernatorial race after he promoted his bets on his friend, Rep. Eric Swalwell (D).
Cloobeck’s wagers included $1,000 on Swalwell becoming the next governor and $2,000 on Swalwell defeating San Jose Mayor Matt Mahan (D) in the upcoming primary. His ban is limited to the California gubernatorial market on Kalshi.
The actions taken by Kalshi come as the prediction markets sector faces heightened scrutiny to enhance regulations against insider trading. The industry currently operates under different rules than traditional markets, prompting some lawmakers to seek reform.
CFTC Weighs In
The Commodity Futures Trading Commission’s (CFTC) Division of Enforcement issued a statement indicating that while Kalshi managed the Langford and MrBeast cases internally, the Commodity Exchange Act (CEA) empowers the division to intervene if necessary.
“In suitable circumstances, the Division will investigate and enforce violations as it has done regarding conduct on designated contract markets (DCMs),” the division noted. “We continue to collaborate with DCMs on their enforcement agendas and the referral of potential violations to us for investigation.”
The CFTC serves as the federal oversight body for prediction markets.