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Kalshi, the forecasting market platform, announced that it had fined and suspended three candidates for the US Congress for betting on the outcome of its own elections. The company called these cases political insider trading and said they were identified by new protective measures that block candidates from accessing the markets for their own campaigns.

We are talking about Matt Klein from Minnesota, Ezekiel Henriques from Texas and Mark Moran from Virginia. According to Kalshi, all three traded contracts related to their own elections, which violates the rules of the site.

The two men made peace, and Moran received the harshest punishment

Kalshi’s official statement said that Klein agreed to a fine of $539.85 and a five-year suspension, while Henriques accepted a fine of $784.20 and the same suspension for five years. The company stressed that both candidates had cooperated with the investigation and admitted violating the rules.

Mark Moran received the harshest punishment. According to Kalshi and ABC News, he was fined $6,229.30, suspended for five years, and refunded profits earned on related transactions. The platform stated that Moran initially admitted the violation, but then stopped responding to the compliance team and did not agree to the settlement.

The story was a continuation of the tightening of the rules on prediction markets

This case came a month after Kalshi announced a new ban on political candidates trading contracts for their own campaigns. At the same time, the platform stated that it would block participants in sports events and sports employees from trading in markets they might influence in advance.

Reuters separately notes that Kalshi herself imposed the punishment within the framework of the internal rules of the exchange, and not the federal regulator. Amid the growing popularity of prediction markets, insider trading has become one of the most painful topics for the sector, and such cases increase pressure on platforms from politicians and regulators. 

Source: https://sigma.world/news/kalshi-bans-three-candidates-over-election-bets/