On the same morning that more than 40 Democratic lawmakers pressed the Trump administration to issue guidance barring federal employees from using insider information to trade on prediction markets, Kalshi plastered Washington, D.C. with green billboards. The messages target a number of misconceptions emerging in politically-motivated rhetoric directed at prediction markets. Namely, Kalshi is emphasizing that they already ban insider trading and enforce that ban. Among the other key messages are:
- Kalshi doesn’t offer death markets
- Kalshi operates under U.S. law
- “We aren’t the house” (meaning, you trade against other traders or market makers, not against the house)
The campaign, which consists of four “Kalshi Rules” posted to X alongside billboards, bus shelter ads, Metro car placements, and a full page Washington Post ad, was the company’s most direct public response yet to a months-long wave of congressional and media attacks. As Kalshi points out, many of the targeted claims have perpetuated misconceptions around Kalshi’s business and how regulated prediction markets operate.
“Not all prediction markets are the same,” the opening post read. “Some are regulated in the United States. Some aren’t. Kalshi is.”
Not all prediction markets are the same.
— Kalshi (@Kalshi) March 30, 2026
Some are regulated in the United States. Some aren’t.
Kalshi is.
Rule #1: We ban insider trading. And we enforce it. pic.twitter.com/GA8mDlE9Ud
Hours before Kalshi’s campaign went live, Sen. Elizabeth Warren posted on X: “Enough is enough. We need to rein in prediction markets” — alongside a clip of herself at a Senate hearing asking the Trump administration “What is wrong with you?” for allowing war betting on prediction markets.
Enough is enough. We need to rein in prediction markets. pic.twitter.com/8GwXpPqGTe
— Elizabeth Warren (@SenWarren) March 30, 2026
In two distinct ways, the post aims at the wrong target. The Iran war trades Warren was referencing occurred on Polymarket’s unregulated offshore platform, not on a CFTC-registered U.S. exchange. And the Trump administration hasn’t changed the underlying law on this. CFTC Regulation 40.11, on the books since the CEA was amended in 2010, already expressly prohibits event contracts involving war, terrorism, and assassination from being listed on any regulated U.S. exchange. Kalshi’s Rule #2 billboard, “We Don’t Do Death Markets. Not in the U.S. They’re illegal,” is pointing at that exact statute. Which brings us to some other key misconceptions.
The core misconceptions driving the moment
To understand what Kalshi is pushing back against, it helps to trace the chain of events that brought Congress to this point, as well as how reporting has misconstrued key facts. The flashpoints have been dramatic, and understandably concerning:
- A mysterious $30,000 bet on Polymarket that returned more than $400,000 after the Trump administration captured Venezuelan President Nicolás Maduro
- Roughly $1 billion in geopolitical contracts trading on Iranian military outcomes
- A cluster of newly created wallets repositioning on an Iran ceasefire hours before a U.S. policy shift, netting a potential $800,000.
In the aftermath of each episode, lawmakers have called for sweeping regulation of prediction markets. What has been consistently underreported is where these trades actually happened.
Every one of those high-profile incidents occurred on Polymarket’s international platform — an offshore, blockchain-based exchange that does not accept U.S. customers, is not registered with the CFTC, and has no know-your-customer requirements. By design, traders operate through anonymous crypto wallets. As DeFi Rate established in January following the Maduro controversy, that platform is “legally and operationally separate from Polymarket US,” which only launched a limited domestic sports offering in December 2025 and does not yet offer political contracts. Kalshi has been CFTC-registered since 2020.
The confusion has been compounded by a second layer of misapplication. As DeFi Rate also noted at the time, several critics, including lawmakers who signed letters to the CFTC and Polymarket’s CEO, appeared to be evaluating these incidents using SEC-style insider trading rules that simply do not apply to event contracts. That distinction matters for the entire legislative debate.
There is also the basic evidentiary problem. In the Maduro case, there was no confirmed evidence of insider trading. Multiple media organizations had advance information about the military situation hours before public announcement. Other documented informational edges in prediction markets have come from web scraping of scheduled official releases, with no insider required. Suspicion is not proof, and as of today, no federal criminal charges or CFTC civil enforcement actions have ever been brought against a trade on a regulated U.S. prediction market, according to CNN.
CNBC quoted a Kalshi spokeswoman making the point precisely: the Iran war bets cited by Sen. Adam Schiff “occurred on Polymarket, not Kalshi.”
Rule #4: We operate under U.S. law.
— Kalshi (@Kalshi) March 30, 2026
Unlike other players – we are federally regulated and based in the United States. pic.twitter.com/tkcCxxXMsb
What the legislation actually looks like, and who’s driving it
Congress has introduced 13 bills targeting prediction markets in 2026, reflecting roughly 10 distinct approaches. They range from narrow insider trading restrictions to sweeping bans on entire contract categories.
The narrower proposals like barring federal officials, congressional staff, and their families from trading where they possess government material non-public information (MNPI) are bipartisan in some cases and represent the approach Kalshi says it actively supports. CEO Tarek Mansour stated publicly that Kalshi backs legislation affirming the ban on insider trading, while emphasizing that any American law applies only to regulated American companies, not to unregulated offshore platforms where the actual incidents have taken place.
The broader bills are a different story, and they are almost exclusively Democratic. The STOP Corrupt Bets Act (Sen. Jeff Merkley and Rep. Jamie Raskin) would ban prediction markets tied to elections, government actions, and military events outright. The Prediction Markets Are Gambling Act (Sen. Schiff, with Sen. John Curtis of Utah providing the bipartisan cover) would strip CFTC-regulated exchanges of sports contracts, effectively destroying most of Kalshi’s current business.
The political framing has been explicit. When Sen. Chris Murphy unveiled his own bill, he stood in front of a poster displaying Polymarket winnings and said the problem was “such obvious, deep corruption happening inside the White House.”
With Donald Trump Jr. holding advisory roles at both Kalshi and Polymarket, the prediction market fight has also become a midterm corruption issue.
Insider trading under SEC and CFTC not the same
Part of what makes this debate so complicated is a genuine legal ambiguity between how the SEC and CFTC handle insider trading. Misunderstanding around this nuance has underpinned some of the misconceptions in reporting and political rhetoric.
In securities markets, trading on MNPI is broadly prohibited under SEC Rule 10b-5, enforced routinely through civil fines, disgorgement of profits, and DOJ criminal referrals. The CFTC’s framework is different. Its primary anti-fraud rule, Rule 180.1, requires showing deception, manipulation, or fraud, not merely that a trader possessed an informational advantage. As a Congressional Research Service analysis published this month noted, whether trading government MNPI on event contracts even violates Rule 180.1 without a clear misappropriation remains legally unsettled.
The CFTC has been moving swiftly to address the gap. Its February 25 enforcement advisory affirmed it has “full authority to police illegal trading practices” on designated contract markets, and Chair Michael Selig has warned that anyone attempting manipulation or insider trading, “we will find you and take action.” A March 12 advisory followed with guidance for DCMs, and the agency is seeking public comment on future rulemaking.
That ambiguity is now being tested in real time. CNN reported Monday that federal prosecutors in Manhattan met with Polymarket, not Kalshi, to discuss how existing laws might apply to the industry’s most lucrative trades, including those surrounding the Maduro capture. A former CFTC enforcement director, Aitan Goelman, told CNN why it will be hard: prosecutors would need to show not only that someone traded on material nonpublic information, but that doing so breached a fiduciary duty or duty of trust. “All this is untested,” Goelman said.
Meanwhile, the most politically-charged trades remain outside the regulated CFTC framework entirely, on Polymarket’s unregulated offshore platform, where the CFTC’s authority simply does not reach.
What Kalshi has done to insulate against insider trading
Against that backdrop, Kalshi’s enforcement record and proactive steps have been concrete, even if investigations and enforcement actions have not been the most public or transparent. In February, the company publicly named and suspended a political candidate who traded on his own candidacy, and a MrBeast employee found to have traded on knowledge of the YouTube star’s video outcomes. At the time, Kalshi’s Head of Enforcement Robert DeNault said: “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’s new guardrails, announced March 23, preemptively block political candidates and sports participants from trading in associated markets, moving from after-the-fact investigation to front-end prevention, with a whistleblower tool added directly to market pages.
On the “death markets” question, Rule #2 of the billboard campaign, the picture requires some nuance. Kalshi did list a market on whether Iran’s Supreme Leader Ali Khamenei would leave office, which generated roughly $21.7 million in trading volume before being halted. When Khamenei was killed, Kalshi settled at the last traded price prior to death, consistent with a death carveout embedded in the original contract rules and in its CFTC product certification.
Rule #2: No death markets.
— Kalshi (@Kalshi) March 30, 2026
Not in the U.S. They’re illegal. pic.twitter.com/dFMEtMEwh5
CEO Tarek Mansour said no trader ended net-negative after reimbursements. Days later, Kalshi filed a formal rulebook amendment with the CFTC codifying that framework in Rule 6.3, converting what had been an informal practice into a documented regulatory commitment. The billboard points to this structural design choice, filed with the federal regulator, that prevents the contract from functioning as a death market.
Polymarket Global’s comparable Khamenei contract had no such carveout, and its resolution entered a dispute cycle among anonymous token holders, highlighting once again the profound differences in their regulatory contexts.
The irony Congress would rather not discuss
There is a particular quality to a legislative body pushing hard on insider trading in prediction markets when its own record on securities insider trading is what it is.
The STOCK Act, passed in 2012, prohibits members of Congress from trading securities on information obtained through their official duties. In its 14 years of existence, not a single member has been criminally prosecuted for violating it. Not to mention, the maximum penalty for a late disclosure is a paltry $200 fine.
Meanwhile, the documented record of auspiciously timed congressional stock trades runs long. Sen. Tom Cotton sold $1.6 million in stocks before COVID pandemic news broke publicly. Attorney General Pam Bondi sold Trump Media stock before the administration’s tariff announcement. Rep. Rob Bresnahan Jr. sold hundreds of thousands in bonds issued by hospital-affiliated companies a month before voting to cut Medicaid. The list goes on.
During the 2025 government shutdown, while constituents navigated missed paychecks and strained SNAP benefits, members of Congress made nearly 200 trades totaling $3–9 million in financial assets. A November 2025 House Administration Committee hearing acknowledged the STOCK Act is insufficient due to lax penalties and near-nonexistent enforcement. According to a University of Maryland survey, 86% of Americans support banning members from trading stocks. But Congress has not managed to pass a ban.
The same institution is now pursuing 13 bills to regulate a market where the incidents that actually drove public outrage happened on an offshore blockchain platform entirely outside domestic jurisdiction.
Kalshi’s billboards make the simple argument that it is a federally regulated U.S. exchange that bans insider trading, enforces it, and operates under U.S. law. Whether that distinction is enough to reshape the congressional debate, or whether lawmakers will continue treating all prediction markets as a single category, may depend less on the evidence than on the political moment driving the legislation.
