later than Polymarket Bet Scandal, Kalshi Backs Torres Bill to Ban Insider Trading
Why Is Kalshi Supporting New Legislation?
Kalshi CEO Tarek Mansour publicly backed a new bill from U.S. Representative Ritchie Torres that viewks to ban insider trading on prediction market platforms. Writing on LinkedIn, Mansour said Kalshi supports the proposal because the company already applies similar restrictions under existing regulatory rules.
“Kalshi is supportive of the bill Ritchie Torres is looking to introduce to affirm the ban on insider trading on prediction markets,” Mansour wrote. “Why? Because we already implemented it.”
The legislation, titled the Public Integrity in Financial Prediction Markets Act of 2026, would prohibit federal elected officials, political appointees, and executive branch employees from placing bets on prediction markets tied to government policy, government action, or political outcomes. Torres introduced the bill earlier this month following renewed debate over whether prediction markets can be misused by individuals with access to non-public government information.
Investor Takeaway
What Triggered the Insider Trading Debate?
The bill follows a high-profile episode involving Polymarket, a decentralized prediction market platform. Earlier this month, a single account reportedly made $400,000 by betting that Venezuelan President Nicolás Maduro would be removed from office by the end of January. later than Maduro was captured, the wager paid out, prompting questions about whether the trade relied on inside or privileged information.
The incident reignited concerns about prediction markets tied to geopolitics, especially when platforms operate without U.S. regulatory oversight. Critics argue that may create incentives for misuse of confidential government information or blur the line between forecasting and speculation with real-world consequences.
Mansour used his LinkedIn post to separate Kalshi from those concerns, arguing that reporting has failed to distinguish between regulated U.S. platforms and offshore operators.
“This should be obvious, but some recent reporting has been conflating regulated prediction markets with unregulated, offshore prediction markets,” he wrote. “What non-American, unregulated platforms do has no relationship to what regulated, American platforms do.”
How Does Kalshi Handle Insider Trading Rules?
Kalshi operates as a in the United States and follows insider trading standards borrowed from traditional financial platforms. Mansour said the platform applies rules similar to those used by the and Nasdaq, barring users from trading if they possess material, non-public information related to a given market.
According to Mansour, those controls are already embedded in Kalshi’s compliance framework, making the proposed legislation more of a legal affirmation than a structural change for the company.
He also noted a key limitation of the bill: it would only apply to regulated American platforms. Offshore and non-U.S. companies would remain outside its reach, even though those venues are where many of the alleged insider trading issues have surfaced.
Investor Takeaway
Why Prediction Markets Are Drawing More Attention
The debate comes as prediction markets post record activity. In December, Kalshi and Polymarket both reported all-time highs in . Kalshi recorded $6.26 billion, while Polymarket reached $2.28 billion, according to data from The Block. Since March 2025, Kalshi has steadily extended its lead as the largest by volume.
The surge has attracted new entrants. Crypto firms and traditional betting companies alike are testing prediction markets as a hybrid between financial trading and event-based wagering. Crypto.com, Gemini, and DraftKings have all entered the space, increasing competition and regulatory attention at the identical time.
As volumes grow, lawmakers and regulators appear more willing to treat prediction markets as financial instruments rather than novelty products. Torres’ bill reflects that shift, focusing on conflicts of interest and public trust rather than market mechanics alone.
