Top U.S. prediction market platform Kalshi has publicly identified two traders it sanctioned for insider trading, part of a broader effort by the company to demonstrate market surveillance, enforcement transparency, and regulatory credibility as prediction markets face increased scrutiny.
The exchange published disciplinary notices Feb. 25 naming Kyle Langford, a former California gubernatorial candidate who traded on his own election market, and Artem Kaptur, a video editor tied to markets involving hugely popular YouTube creator MrBeast.
The disclosures were accompanied by a detailed enforcement post on Kalshi’s website authored by the company’s Head of Enforcement, Robert DeNault, who outlined the scope of the exchange’s monitoring efforts.
“As a regulated exchange, we ban insider trading,” DeNault wrote. “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.”
DeNault said the exchange plans to continue publishing enforcement disclosures.
“Investigations take time, and there will be more that we’ll disclose on our notices page going forward,” he wrote, referring to the “Regulatory Documents” page on Kalshi’s site.
The public identification of violators represents one of the clearest signals yet that Kalshi is attempting to adopt enforcement transparency more typical of traditional financial exchanges.
Candidate trading on own election triggers enforcement action
One disciplinary notice identifies Langford, a Republican who ran for governor in California before exiting that race and launching a congressional campaign. The notice states that Langford announced his gubernatorial candidacy in February 2025 and was added as a contract option in Kalshi’s 2026 California governor market on May 24 of that year. According to the filing, he placed two trades on the contract the same day he was listed and promoted those trades on social media.
The Kalshi Disciplinary Committee concluded that, as a candidate, Langford qualified as a direct decision maker capable of influencing the outcome of the event, violating Rule 5.17(z), which prohibits trading on event contracts where a participant may influence the underlying outcome. The notice also states that during a call with Kalshi’s compliance and legal departments, Langford acknowledged the trades were improper.
The disciplinary action imposed a five-year suspension from direct or indirect access to Kalshi along with a financial penalty totaling $2,246.36.
In his Kalshi post about the actions, DeNault described how the case came to light.
“Our Surveillance Department saw an online video by a candidate for Governor of California that appeared to show him trading on his own candidacy,” DeNault wrote. “We immediately froze his account and opened an investigation.”
He added that while candidates may follow prediction market forecasts, they should not participate directly, noting that “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.”
Insider trading case tied to MrBeast-linked markets
A separate disciplinary notice names Kaptur in connection with trading activity tied to YouTube-related event markets. The notice does not specify the exact contract involved, but states the trades occurred in markets related to a YouTube channel associated with MrBeast. Such markets can include contracts based on video viewership, subscriber milestones, upload activity, or other measurable performance indicators.
The notice states that in August and September of last year, Kaptur traded while employed by or affiliated with a “Source Agency” connected to those markets and possessed material non-public information (MNPI) relevant to the contracts. In comments to NPR, DeNault said the exchange determined the trader “was employed as an editor for the streamer’s show.”
The Kalshi Disciplinary Committee concluded this violated Rule 5.17(y), which prohibits trading on MNPI, and also found that Kaptur failed to cooperate fully with the investigation, violating Rule 3.6(a). The resulting disciplinary action imposes a two-year suspension from direct or indirect access to the exchange, along with a $20,397.58 penalty.
DeNault said the activity initially drew attention because of unusual trading performance, writing that Kalshi’s “surveillance systems flagged his near-perfect trading success on markets with low odds, which were statistically anomalous.”
DeNault added that the publicly visible nature of trading data also helped surface the issue.
“Because all trading data is publicly available, a number of Kalshi users sent us tips about unusual activities they saw in the trading data,” he wrote.
Kalshi highlights enforcement reporting to regulators
According to DeNault, accounts in both cases were frozen before any profits could be withdrawn. He confirmed the cases were reported to the Commodity Futures Trading Commission (CFTC), which oversees Kalshi as a designated contract market.
“We’ve reported these cases to the CFTC, as we are required to do, and Kalshi will be donating fines imposed to a nonprofit that provides consumer education on derivatives markets,” he wrote.
DeNault’s post also outlined additional oversight measures, including an independent Surveillance Audit Committee that is expected to publish statistics on flagged trades, investigations, and enforcement referrals.
Drawing a regulatory line between U.S. and offshore markets
The disclosures arrive amid ongoing debate over insider trading risk, regulatory authority, and the types of contracts listed on prediction platforms. Lawmakers, including Senator Chris Murphy, have publicly questioned the regulatory footing of prediction markets, while online discussions on X and Discord have raised concerns about whether traders with non-public information can exploit certain event contracts.
Kalshi has repeatedly responded by emphasizing its surveillance infrastructure, formal disciplinary process, and reporting obligations to the CFTC as evidence that regulated prediction markets can operate under standards similar to traditional derivatives exchanges.
That messaging has grown stronger as critics point to controversial or geopolitically sensitive contracts appearing on various prediction platforms. In public responses, Kalshi executives have argued that some of the most widely circulated examples involve offshore services rather than regulated U.S. exchanges. They have specifically distinguished Kalshi from the international platform operated by Polymarket, which runs outside CFTC supervision and is the source for many of the allegedly questionable contracts cited.
By publishing detailed disciplinary notices, naming violators, and outlining investigative processes publicly, Kalshi appears intent on reinforcing that regulatory separation, positioning itself as a supervised exchange rather than a more loosely monitored offshore prediction site.
Building trust in a scrutinized industry
Kalshi also recently launched an insider-trading enforcement hub aimed at centralizing disciplinary notices, surveillance updates, and compliance disclosures, a move that signals a more proactive approach to transparency as debate around prediction markets intensifies.
“No system is perfect,” DeNault wrote. “No financial exchange is immune from bad actors. Not stock exchanges, not banks, not prediction markets. We’re committed to finding and deterring insiders, manipulators, or other bad actors on Kalshi.”
For Kalshi, these disclosures appear to serve both practical and strategic purposes, reinforcing market integrity, demonstrating compliance to the CFTC, and distinguishing a regulated U.S. exchange from offshore prediction platforms operating outside of U.S. oversight. With hundreds of investigations underway and additional disciplinary notices expected, the company appears intent on positioning prediction markets as a more mature financial market sector shaped increasingly by traditional compliance expectations.
DeFi Rate has sought comment from DeNault regarding future enforcement disclosures and the treatment of counterparties in insider trading cases. We will update the story if we receive a response.
UPDATE: In a Feb. 25 advisory issued in response to Kalshi’s public insider trading disclosures, the CFTC’s Division of Enforcement emphasized that the Commission “has full authority to police illegal trading practices occurring on any DCM,” including prediction markets. The agency noted that while a designated contract market may take internal disciplinary action, the CFTC retains independent authority under the Commodity Exchange Act to investigate and prosecute misconduct, including misappropriation of confidential information, as well as fraud, manipulation, wash trading, and other prohibited practices.
