Posted on: February 25, 2026, 04:37h.
Last updated on: February 25, 2026, 04:37h.
- Prediction market operator is clamping down on insider trading
- One case involved an editor working for social media star MrBeast
- Another involved the California gubernatorial race
Kalshi wants market participants and regulators to know it takes allegations of insider trading seriously with the prediction today highlighting success in closing two such cases.
One of the cases involved an editor working for YouTube personality MrBeast, who’s well-known in gaming circles. The other pertained alleged insider trading involving the California race for governor. The MrBeast staffer is said to have traded approximately $4,000 in YouTube markets on Kalshi.
In both of these cases, our systems flagged the trades and our surveillance team froze the traders’ accounts. Neither trader withdrew any profits,” according to the prediction market operator. “These penalties are not indicative of future penalties – everything depends on the case, including amount traded and rules violated.”
Kalshi levied a two-year suspension and a financial penalty equivalent to five times the trade size against the MrBeast employee.
Not California Dreamin’ on Kalshi
In the other case, Kalshi suspended Republican Kyle Langford who previously wagered on himself in the California governor’s race and posted about it on social media. He’s since dropped out of that contest and is running for congress in the state’s 26th district.
“Punishment: 5-year ban + financial penalty (10 times the initial trade size). Note: this candidate recently announced he is no longer running for Governor and is now instead running for Congress,” adds Kalshi.
Separately, Stephen Cloobeck, a significant donor to Democrat candidates and himself a former candidate for California’s top office, was barred from trading Kalshi event contracts on California’s gubernatorial after he touted making bets on friend Rep. Eric Swalwell (D).
One of Cloobeck’s wagers was $1,000 on Swalwell to become the next governor of the Golden State. Another was $2,000 on the congressman to beat San Jose Mayor Matt Mahan (D) in the upcoming primary. Cloobeck has only been barred from trading the California gubernatorial market on Kalshi.
The moves by Kalshi arrive as the prediction markets industry is under increasing scrutiny to better regulate insider trading. Currently, the industry isn’t beholden to the same protocols as traditional markets though some politicians are aiming to change that.
CFTC Chimes In
The Commodity Futures Trading Commission’s (CFTC) Division of Enforcement issued an advisory, noting that while Kalshi handled the MrBeast and Langford cases internally, the Commodity Exchange Act (CEA) grants the division authority to get involved if it sees fit.
“In appropriate cases, the Division will investigate and prosecute violations, as it always has with respect to conduct occurring on designated contract markets (DCMs),” notes the division. “The Division continues to coordinate with DCMs regarding their enforcement dockets and referral of appropriate potential violations to the Division for investigation.”
The CFTC is the federal regulator of prediction markets.
