Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Kalshi CEO expects US DOJ to prosecute insider trading cases

semafor.com

Post reply on HN
Print view View original

31–40 of 150 posts

Re: Kalshi CEO expects US DOJ to prosecute insider trading cases

#31

Post by mcmcmc »

slg wrote: post #16
mlmonkey wrote: post #7

Earlier quoted context omitted.

You give the Dems too much credit.

No, I was commenting on the current administration's corruption. I don't think most previous Republican administrations would have tolerated the type of insider trading we have seen from people close to the administration. It goes beyond ideology, turning a blind eye to this behavior among your subordinates is a sign of weak leadership and poor management.

If they’ve been fine with Congress trading stocks on insider knowledge forever why would this be any different?

Re: Kalshi CEO expects US DOJ to prosecute insider trading cases

#32

Post by tptacek »

echelon wrote: post #30
lowkey_ wrote: post #24

> “If you commit insider trading on Kalshi, that can and will at some point be a federal crime. It is a federal crime,” Am I misunderstanding? It seems like two different statements he always conflates. If it becomes a federal crime at some point, it will become illegal from that point — you can't prosecute people for acts committed before they were crimes. The only way that this could be a federal crime right now is…

IANAL, but my understanding is that they can make it a retroactive crime or clarify existing laws in ways that include prediction markets. Don't assume safety. Edit - was curious: https://en.wikipedia.org/wiki/Ex_post_facto_law So maybe not? I'd love a judicial scholar's input.

They absolutely cannot make it a retroactive crime. This isn't so much con law as high school civics in the US.

Re: Kalshi CEO expects US DOJ to prosecute insider trading cases

#33

Post by teeklp »

Karrot_Kream wrote: post #25
pwillia7 wrote: post #17

Earlier quoted context omitted.

when have we ever defined gaming/gambling as 'a thing where the house takes a rake' ? I don't understand this argument and it always feels disingenuous when brought up.

Er it's not. Gambling where the house takes a cut is considered a form of commercial gambling and is often made illegal or has stipulations applied to it. If you're asking about why prediction markets fall under the CFTC, this is actively evolving but generally prediction markets are considered to be under the CFTC because they can be used to hedge against events. For example if you're trying to do business in Oman b…

This is gibberish.

Re: Kalshi CEO expects US DOJ to prosecute insider trading cases

#34

Post by mcmcmc »

echelon wrote: post #30
lowkey_ wrote: post #24

> “If you commit insider trading on Kalshi, that can and will at some point be a federal crime. It is a federal crime,” Am I misunderstanding? It seems like two different statements he always conflates. If it becomes a federal crime at some point, it will become illegal from that point — you can't prosecute people for acts committed before they were crimes. The only way that this could be a federal crime right now is…

IANAL, but my understanding is that they can make it a retroactive crime or clarify existing laws in ways that include prediction markets. Don't assume safety. Edit - was curious: https://en.wikipedia.org/wiki/Ex_post_facto_law So maybe not? I'd love a judicial scholar's input.

“Retroactive” crime is as you say, ex post facto, and specifically disallowed by the US Constitution.

Re: Kalshi CEO expects US DOJ to prosecute insider trading cases

#35

Post by notahacker »

chao- wrote: post #18
georgemcbay wrote: post #3

Ok, but isn't the idea that prediction markets surface private knowledge a big part of the defense as to why they shouldn't be treated as illegal gambling? So like, which is it, is insider trading expected, or are these just gambling sites that should be illegal in many jurisdictions?

If all one cares about is the accuracy of predictions (i.e. setting aside value judgements vis-a-vis society or fairness), it does seem like "insider trading" should make prediction markets more accurate.

It makes them more accurate at the time the insider places the bet. But to maximise profit, they are incentivised to misdirect before they place the bet (and worse still from society's perspective, are incentivised to take counter-intuitive or downright harmful actions to profit at the expense of people who bet on the view that it made no sense for them to do that)

Re: Kalshi CEO expects US DOJ to prosecute insider trading cases

#36

Post by tptacek »

This issue reveals the gap between the prediction market premise and what these things actually are, which is: unregulated prop gambling venues.

If things like Kalshi and Polymarket are prediction markets, then, at least as far as the intrinsic concerns of the market itself are concerned, insider trading is a good thing; literally part of the point.

If they are instead how they function today, then insider trading is a game-breaking fairness issue, like having a device to read your opponents cards in a poker game, and then they're a real problem.

You can tell what these businesses think their platforms are for by how they handle these issues.

Re: Kalshi CEO expects US DOJ to prosecute insider trading cases

#37

Post by wmf »

SpaceManNabs wrote: post #22

Isn't the entire point of prediction markets to surface insider trading as a feature and not a bug? Short, casual reads - https://jamaalglenn.substack.com/p/prediction-markets-were-d... - https://money.com/prediction-markets-insider-trading/ More academic? - https://mason.gmu.edu/~rhanson/insiderbet.pdf AND - https://www.youtube.com/watch?v=4yZKGbq1YmA Discussion on possible solutions that references the academic vie…

This is a case where normal people's ideas of fairness may never agree with the experts.

Re: Kalshi CEO expects US DOJ to prosecute insider trading cases

#38

Post by tptacek »

notahacker wrote: post #35
chao- wrote: post #18

Earlier quoted context omitted.

If all one cares about is the accuracy of predictions (i.e. setting aside value judgements vis-a-vis society or fairness), it does seem like "insider trading" should make prediction markets more accurate.

It makes them more accurate at the time the insider places the bet . But to maximise profit, they are incentivised to misdirect before they place the bet (and worse still from society's perspective, are incentivised to take counter-intuitive or downright harmful actions to profit at the expense of people who bet on the view that it made no sense for them to do that)

How does this trade work? Nobody knows who the insider is, they only see market direction.

Re: Kalshi CEO expects US DOJ to prosecute insider trading cases

#39

Post by johnnyo »

echelon wrote: post #30
lowkey_ wrote: post #24

> “If you commit insider trading on Kalshi, that can and will at some point be a federal crime. It is a federal crime,” Am I misunderstanding? It seems like two different statements he always conflates. If it becomes a federal crime at some point, it will become illegal from that point — you can't prosecute people for acts committed before they were crimes. The only way that this could be a federal crime right now is…

IANAL, but my understanding is that they can make it a retroactive crime or clarify existing laws in ways that include prediction markets. Don't assume safety. Edit - was curious: https://en.wikipedia.org/wiki/Ex_post_facto_law So maybe not? I'd love a judicial scholar's input.

No, you cannot retroactively make something a crime as you have found.

That way lies madness.

If the govt could do that, they could arrest anyone, anytime simply by making whatever they did yesterday retroactively illegal.

Re: Kalshi CEO expects US DOJ to prosecute insider trading cases

#40

Post by lowkey_ »

echelon wrote: post #30
lowkey_ wrote: post #24

> “If you commit insider trading on Kalshi, that can and will at some point be a federal crime. It is a federal crime,” Am I misunderstanding? It seems like two different statements he always conflates. If it becomes a federal crime at some point, it will become illegal from that point — you can't prosecute people for acts committed before they were crimes. The only way that this could be a federal crime right now is…

IANAL, but my understanding is that they can make it a retroactive crime or clarify existing laws in ways that include prediction markets. Don't assume safety. Edit - was curious: https://en.wikipedia.org/wiki/Ex_post_facto_law So maybe not? I'd love a judicial scholar's input.

IANAL but a proud American haha, and we're very specific on not allowing ex post facto laws per our constitution. It would be a huge avenue for abuse of power by the government against the people.

The caveat I added to my initial comment that you also mentioned was that they could try to find a relevant existing law and retrofit it, e.g. general securities laws, and say that this is a securities market and so this has always been illegal — but it's very unlikely and I doubt it would work. Far, far more likely that we pass explicit laws about this.

Post reply on HN