Blab Tech
Kalshi Tightens Insider-Trading Controls as Trump-Backed Prediction Markets Expand
Kalshi, the New York‑based prediction‑market platform, has stepped up its fight against insider trading after a string of high‑profile investigations.
Kalshi’s compliance framework includes mandatory identity verification for all traders and a custom trade‑surveillance system that monitors activity for manipulation and insider trading. The platform publicly reports all trades to the CFTC on a daily basis, a requirement that aligns its oversight with that of regulated futures markets.
In early 2026, Kalshi’s systems flagged a series of trades by former U.S. Representative George Santos that were linked to markets tied to the State of the Union address. According to the company, the investigation was conducted internally and the evidence was forwarded to the CFTC. Santos later agreed to a $35,000 settlement with the agency, resolving the federal probe. Kalshi also announced that it is pursuing its own enforcement action against Santos for violating the exchange’s rules and, if penalties are recovered, it will reimburse affected traders.
Another case involved Gabriel Perez, a former White House teleprompter operator. Federal regulators are examining whether Perez used advance knowledge of President Trump’s prepared remarks to trade on Kalshi contracts that were linked to specific words or topics that would appear in presidential speeches. Kalshi’s lawyer and head of enforcement, Robert Denault, confirmed on X that the surveillance team had flagged, investigated, and referred the trades to the CFTC.
The CFTC has stepped up scrutiny of prediction markets in 2026. In February, the agency issued an advisory that highlighted two enforcement cases involving non‑public information and fraud on Kalshi. The advisory also reaffirmed the CFTC’s authority over event contracts, which are the building blocks of prediction‑market products.
Kalshi’s expansion of surveillance tools has included the deployment of AI‑based monitoring and a partnership with Solidus Labs, a provider of trade‑surveillance technology used in institutional markets. The company says the new framework will help detect sophisticated manipulation across its more than 4,000 listed markets.
While Kalshi maintains a strict stance against insider trading, the broader prediction‑market industry remains divided on the issue. Polymarket, a rival platform, has stated that insider trading is a feature rather than a bug. The debate has intensified as the Trump family has entered the space.
Donald Trump’s media company, Trump Media & Technology Group (TMTG), is developing TruthPredict, a prediction‑market platform that will allow users to trade contracts tied to political and economic outcomes. TMTG has also launched Truth API, a premium service that provides rapid, machine‑readable access to posts on Truth Social, including those made by President Trump. The combination of a social‑media platform, a data‑feed service, and a prediction‑market interface creates a new ecosystem in which public statements can move markets and traders can pay for near‑real‑time access to potentially market‑moving information.
Donald Trump Jr. is a paid strategic advisor to Kalshi and sits on the advisory board of Polymarket through his venture‑capital firm 1789 Capital. The dual relationships mean that the president’s eldest son has ties to both of the industry’s largest prediction‑market platforms while his father is developing a competing service. No public evidence indicates that Trump Jr. has used privileged government information to trade on either platform.
The regulatory and industry developments underscore the growing scrutiny of prediction markets as venues for political and economic speculation. Kalshi’s enhanced surveillance, the CFTC’s advisory, and the high‑profile enforcement actions against Santos and Perez illustrate the challenges of maintaining market integrity in a space where public statements can quickly translate into tradable contracts.
As TMTG prepares to launch TruthPredict, the industry will watch how the new platform navigates regulatory expectations and how it competes with established exchanges like Kalshi and Polymarket. The outcome of ongoing investigations and the effectiveness of Kalshi’s surveillance upgrades will likely influence future policy discussions around insider trading in prediction markets.
The current situation remains under active regulatory review. Kalshi has not announced any new enforcement actions beyond the Santos settlement and the ongoing investigation of Perez. TMTG has not yet released a launch date for TruthPredict, and no official statements have been made regarding the company’s compliance framework.
Kalshi’s compliance framework includes mandatory identity verification for all traders and a custom trade‑surveillance system that monitors activity for manipulation and insider trading. The platform publicly reports all trades to the CFTC on a daily basis, a requirement that aligns its oversight with that of regulated futures markets.
In early 2026, Kalshi’s systems flagged a series of trades by former U.S. Representative George Santos that were linked to markets tied to the State of the Union address. According to the company, the investigation was conducted internally and the evidence was forwarded to the CFTC. Santos later agreed to a $35,000 settlement with the agency, resolving the federal probe. Kalshi also announced that it is pursuing its own enforcement action against Santos for violating the exchange’s rules and, if penalties are recovered, it will reimburse affected traders.
Another case involved Gabriel Perez, a former White House teleprompter operator. Federal regulators are examining whether Perez used advance knowledge of President Trump’s prepared remarks to trade on Kalshi contracts that were linked to specific words or topics that would appear in presidential speeches. Kalshi’s lawyer and head of enforcement, Robert Denault, confirmed on X that the surveillance team had flagged, investigated, and referred the trades to the CFTC.
The CFTC has stepped up scrutiny of prediction markets in 2026. In February, the agency issued an advisory that highlighted two enforcement cases involving non‑public information and fraud on Kalshi. The advisory also reaffirmed the CFTC’s authority over event contracts, which are the building blocks of prediction‑market products.
Kalshi’s expansion of surveillance tools has included the deployment of AI‑based monitoring and a partnership with Solidus Labs, a provider of trade‑surveillance technology used in institutional markets. The company says the new framework will help detect sophisticated manipulation across its more than 4,000 listed markets.
While Kalshi maintains a strict stance against insider trading, the broader prediction‑market industry remains divided on the issue. Polymarket, a rival platform, has stated that insider trading is a feature rather than a bug. The debate has intensified as the Trump family has entered the space.
Donald Trump’s media company, Trump Media & Technology Group (TMTG), is developing TruthPredict, a prediction‑market platform that will allow users to trade contracts tied to political and economic outcomes. TMTG has also launched Truth API, a premium service that provides rapid, machine‑readable access to posts on Truth Social, including those made by President Trump. The combination of a social‑media platform, a data‑feed service, and a prediction‑market interface creates a new ecosystem in which public statements can move markets and traders can pay for near‑real‑time access to potentially market‑moving information.
Donald Trump Jr. is a paid strategic advisor to Kalshi and sits on the advisory board of Polymarket through his venture‑capital firm 1789 Capital. The dual relationships mean that the president’s eldest son has ties to both of the industry’s largest prediction‑market platforms while his father is developing a competing service. No public evidence indicates that Trump Jr. has used privileged government information to trade on either platform.
The regulatory and industry developments underscore the growing scrutiny of prediction markets as venues for political and economic speculation. Kalshi’s enhanced surveillance, the CFTC’s advisory, and the high‑profile enforcement actions against Santos and Perez illustrate the challenges of maintaining market integrity in a space where public statements can quickly translate into tradable contracts.
As TMTG prepares to launch TruthPredict, the industry will watch how the new platform navigates regulatory expectations and how it competes with established exchanges like Kalshi and Polymarket. The outcome of ongoing investigations and the effectiveness of Kalshi’s surveillance upgrades will likely influence future policy discussions around insider trading in prediction markets.
The current situation remains under active regulatory review. Kalshi has not announced any new enforcement actions beyond the Santos settlement and the ongoing investigation of Perez. TMTG has not yet released a launch date for TruthPredict, and no official statements have been made regarding the company’s compliance framework.
