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

41–50 of 150 posts

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

#41

Post by tptacek »

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…

You have managed to conjure a definition of "gambling" that excludes casino blackjack.

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

#42

Post by notahacker »

tptacek wrote: post #38
notahacker wrote: post #35

Earlier quoted context omitted.

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.

You are a spokesperson or decision maker for an entity which is bet on, like a sports team or the government. You publicly indicate that you are going to do one thing (probably the thing that makes most sense), so the market bakes that into their assumptions and offers favourable odds for bets on doing the other thing. Then you place your bet shortly before you do the other thing.

(it's true that low level insiders might have limited influence on the actual outcome, but the current suspicion with prediction markets is that some of the participants do have that influence, or are being intentionally helped by people that can)

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

#43

Post by chris_money202 »

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.

The executive branch executes laws (prosecutes crime) under its own interpretation of the law. It's the supreme court that determines if that interpretation is acceptable or fair. I.e. you could be prosecuted under an executive's interpretation of an existing law when the crime was committed and if the court deems it acceptable you could be found guilty by a jury. (In the USA)

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

#44

Post by RobRivera »

tptacek wrote: post #36

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…

Courts have ruled that these markets are regulated under the CFTC. So they are regulated. Now as to whether it is properly regulated, thats a different matter.

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

#45

Post by wasabi991011 »

bowmessage wrote: post #29
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?

Agreed. So who are the outsider chumps taking the other ends of these bets? At this point, it doesn’t make sense to participate unless you’re an insider.

You can be an outsider with expertise, in which case you can still beat the non-expert outsiders.

So now who are the non-expert outsiders and why would they bet? Outsiders who think they are experts but are wrong.

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

#47

Post by lotsofpulp »

mcmcmc wrote: post #31
slg wrote: post #16

Earlier quoted context omitted.

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?

Because the law protects members of Congress, not

>people close to the administration.

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

#48

Post by GolfPopper »

tptacek wrote: post #32
echelon wrote: post #30

Earlier quoted context omitted.

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.

A couple decades ago I would have agreed with you. But the United States today does not have rule of law, only the pretense of it.

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

#49

Post by Traster »

tptacek wrote: post #36

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…

Even if you buy the idea that Kalshi is a prediction market whose mechanism is gambling but whose product is accurate predictions, you don't have to buy the idea that insider trading is a good thing. Yes, in the rare occasion there exists someone with (a) insider information (b) confidence their actions won't impact their insider position and (c) access to capital - then you get extremely accurate predictions.

In every other case you get worse predictions. Since those who are predicting have to now construct their bets such that they know they can always get run over by an insider. So in the general case it reduces the ability of the predictors to push the market in the right direction, because they always have to risk manage the fact that someone out there might run them over with insider information.

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

#50

Post by chiefalchemist »

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.

What proof do you have that there is a difference between the Team Red and Team Blue, other than your not on the team you’re railing against.

For example, given Nancy Pelosi’s effectiveness as an investor, she was effectively a highly successful day trader with a side hustle as a representative of her constituents.

Framing this as a Left v Right, is at best, naive.

Post reply on HN