Is Insider Trading Happening On Kalshi?

Is Insider Trading Happening On Kalshi?

Summary

~1.0 min read
Prediction markets have shown traders making remarkably accurate bets, such as Lady Gaga and Ricky Martin appearing at the Super Bowl, and even predicting the US invasion of Venezuela. While these raise concerns about insider trading, there's a significant legal distinction. Insider trading laws primarily apply to SEC-regulated stocks and securities. However, prediction markets are classified as derivatives, regulated by the Commodity Futures Trading Commission (CFTC). For derivatives, insider trading is considered a "breach of duty," but the legal bar for conviction is incredibly high, often allowing individuals to avoid prosecution.