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- Speaking at DC Fintech Week, Kalshi CEO Tarek Mansour defended prediction markets against mounting insider trading concerns, arguing that the public visibility of the blockchain and trading data makes market manipulation easier to detect than in traditional finance because bad actors are “committing crime in broad daylight.”
- His comments come amid a wave of high-profile integrity cases—including a U.S. Army soldier trading on Polymarket, a White House teleprompter operator, and former Rep. George Santos being permanently banned from Kalshi—while the CFTC and state regulators continue to battle in court over who has ultimate jurisdiction over the industry.
Kalshi CEO Tarek Mansour defended prediction markets this week as insider trading concerns mount, arguing at DC Fintech Week that the visibility of trades makes misconduct easier to detect.
That defense matters as prediction markets have grown to tens of billions of dollars since the 2024 election, while platforms including Kalshi and Polymarket face rising scrutiny from regulators, lawmakers and states over both market integrity and who has authority to oversee the industry.
Mansour described that transparency as a “blessing and a curse for prediction markets,” according to remarks cited by The Block. He added: “You’re committing crime in broad daylight, and that makes it so much easier to kind of police that sort of activity.”
Recent cases put market integrity in focus
The comments come after several high-profile cases tied to nonpublic information.
In April, an active-duty U.S. Army soldier was charged with using confidential information to place bets on Polymarket ahead of Nicolás Maduro’s capture, according to the report. In another case, a former White House teleprompter agreed to pay more than $172,000 to settle charges that he used advance access to President Donald Trump’s speeches to profit on Kalshi.
The report also noted that former Rep. George Santos became the first person permanently banned from Kalshi in August after being accused of violating platform rules by trading on whether he would attend the State of the Union. Mansour said Kalshi’s surveillance systems flagged that activity within a few minutes.
Mansour, discussing the Santos case, said: “So when George Santos… he got out of jail, decided the first thing he wants to do is commit crime again, he decided to insider trade on Kalshi.”
State and federal regulators are still fighting over oversight
The broader dispute is not only about insider trading. It is also about whether prediction markets are regulated primarily by the Commodity Futures Trading Commission or by individual states.
According to the report, the CFTC has argued that most prediction market contracts are swaps under its exclusive jurisdiction. States, meanwhile, have said firms such as Kalshi and Polymarket are operating illegally, violating gaming laws and avoiding taxes.
That conflict has already spilled into court. States have sued prediction market platforms, and the CFTC has also sued states as the jurisdiction battle continues. The issue could eventually reach the U.S. Supreme Court, the report said, as different states have reached different conclusions in recent months.
Lawmakers from both parties have also introduced bills over the past year to restrict trading by people with access to nonpublic information, while states including New York have barred state officials from using such information to profit from prediction markets.
Mansour framed the policy question in broader terms, saying: “I think it’s a choice of whether prediction markets exist in the U.S. or they go offshore — they go back to being offshore.”
For operators and regulators, the next key question is whether courts or lawmakers draw clearer lines on who can offer these markets, and under what anti-insider-trading rules.
Source: As reported by Sarah Wynn.
