US Politician Receives Ban from Kalshi Platform Over Insider Trading Violations
Agency head Mike Selig of the CFTC announced the creation of a specialized prediction markets advisory group designed to identify and prosecute insider trading, emphasizing that violators will face penalties.
An individual who previously ran for the position of California governor has received a platform ban from Kalshi following bets placed on his own electoral campaign last year, which constituted a breach of insider trading regulations, according to an announcement made by the prediction market platform on Wednesday.
In a formal statement issued by Robert DeNault, Kalshi's head of enforcement, the individual in question wagered approximately $200 on the outcome of his California gubernatorial campaign and subsequently publicized this activity on X, which resulted in a suspension spanning five years from the prediction market platform along with a financial penalty of $2,000.
The platform refrained from publicly identifying the politician by name, but disclosed that he has discontinued his gubernatorial campaign and is currently pursuing a seat in Congress.
The characteristics provided appear to match Kyle Langford, an individual who switched from Republican to Democrat affiliation and is presently running for election to the US House to represent California's 26th Congressional District.
Through a post made on X and published on May 25, 2025, Langford disseminated a video showing himself making the wager on Kalshi, allocating $98.76 toward the probability of his electoral victory.
The platform confirmed that no profits were withdrawn from the account in question and that the matter was formally reported to the CFTC.
Cointelegraph made contact with Langford to obtain additional commentary but did not receive an immediate reply.
In related enforcement actions, Kalshi disclosed that it also imposed penalties on a YouTube editor who conducted trades totaling approximately $4,000 on YouTube stream markets during the period between August and September 2025 — conduct that similarly violated Kalshi's insider trading regulations, leading to a two-year suspension and a financial penalty of roughly $20,000.
"Our surveillance systems identified his nearly flawless trading performance on markets with low probability odds, which exhibited statistically unusual patterns," Kalshi stated, adding that with assistance from other users on the platform, they determined his place of employment and reached the conclusion that he presumably had access to material non-public information.
Although Kalshi chose not to publicly identify the YouTube editor by name, various mainstream media outlets have extensively reported the individual to be Artem Kaptur, someone employed by the widely-followed YouTuber MrBeast.
Kalshi, which operates as a platform regulated by the Commodity Futures Trading Commission, indicated that it has examined 200 cases and placed freezes on multiple accounts that were flagged. The platform currently maintains more than a dozen ongoing active investigations.
Earlier during this month, Kalshi enhanced its monitoring capabilities by creating a surveillance audit committee and forming a partnership with Solidus Labs, a crypto trading surveillance platform, with the objective to "detect, investigate, and address market abuse."
These enhanced enforcement measures arrive as a response to increased regulatory oversight of prediction markets as these platforms gain mainstream acceptance and visibility.
Legislative action was introduced by US lawmakers during the previous month to impose restrictions on trading activities conducted by government insiders, following an incident where a single Polymarket user generated profits exceeding $400,000 through bets connected to Venezuelan President Nicolás Maduro, with wagers placed mere hours prior to US forces apprehending him in Caracas.
CFTC sends strong warning to future violators
During a statement made on Thursday, CFTC Chair Mike Selig announced that the agency has established a prediction markets advisory designed to work collaboratively with industry participants in their collective efforts to identify and apprehend insider traders.
Selig issued a stern warning indicating that individuals who participate in insider trading activities will be subject to consequences:
"Let me be clear: if you attempt to engage in manipulation, fraud, or insider trading, we will find you and take action."