Kalshi CEO expects US DOJ to prosecute insider trading cases

I don't think he's saying people who do that right now will be prosecuted. I think he's just saying that it will become illegal so anyone doing it then runs the risk of being prosecuted.

> The only way that this could be a federal crime right now is if the government starts prosecuting it under existing laws without any changes. I don't see that as likely.

Fully agree, especially since Kalshi just caught one of the editors of MrBeast's videos red handed (he was betting on the "What words will MrBeast say in his next video" market with 100% accuracy) and while Kalshi banned the guy the DOJ has shown 0 interest in doing anything with that.

Ok calling this out. Both parties are involved in crimes. An example is both party's are involved in supporting Israel's fascist objectives.

Just because there is less reports of corruption in the past by dems doesn't change anything. Corruption extends beyond parties, its not a political problem. Its a human problem.

I don't expect to see much change when the dems come back into power, albeit, it be less apparent and of a different nature, I.E more indiscriminate surveillance and less racial profiling ..

There is some kind of cultural thing going on that transcends the party's IMHO that's keeping this problem going.

This is actually a good example of this not being a partisan issue. A congressional stock trading ban is one of the few issues that doesn't break down by party lines. Both Republicans and Democrats have put forward bills to ban it and the percentage of the population in support of such efforts is very similar between Republicans and Democrats.

I'm also not going to defend Congressional stock trading. I think it should be banned. But there are some differences about who is doing the trading/betting, what specifically they are trading/betting on, and what that information communicates to the public. There's a fundamental difference between a random staffer betting the US will attack Iran on a certain date which becomes public immediately compared to a Congressperson themselves buying stock in a weapon manufacturer in the leadup to an attack knowing the purchase won't be disclosed to the public for up to 45 days.

Like I said, I would be against both, but it's much easier to justify Congressional stock trading than the insider trading we see on these prediction markets. Afterall, it isn't like Congress is moving to remove all insider trading legislation, so there is some recognition of nuance here even if they give themselves more leeway than we would want.

> Since those who are predicting have to now construct their bets such that they know they can always get run over by an insider.

The average person does not do this. People trade individual stocks all the time, despite every other market participant (banks, hedge funds, etc.) having better information and technology.

It's why institutions like Citadel pay for retail order flow. They know that retail traders don't have an edge and, if anything, often end up being negative signal.

I don't understand why it is a crime under current US law.

Prediction markets can only do sports gambling (the vast majority of their volume) because they self-certify under the CFTC. The CFTC doesn't have the same standards of "insider trading" as the stock market, because insider trading is the entire point of business at the CFTC!

If you're trading, like, oil futures or wheat futures or whatever, you are likely doing so specifically because you have inside information about your business needs or production that you want to hedge.

I understand why people are mad about gambling versus someone who has insider information, but under current US law I'm not sure that there is a case to be made.