MrBeast editor and former California 24-year-old gubernatorial candidate fined by Kalshi for insider trading

Predictions market Kalshi says it has closed two insider cases involving a former California gubernatorial candidate and an editor who worked at the popular YouTube channel MrBeast.

On Wednesday, Kalshi disclosed that it has opened roughly 200 investigations to date, with about a dozen escalating into "active cases." The announcement comes as U.S. lawmakers increase scrutiny of potential insider trading on prediction platforms.

One case involved Artem Kaptur, an editor for MrBeast's show, who the company said appeared to have access to material non-public information and traded on it in violation of platform rules. Kalshi said its surveillance team  flagged Kaptur's "near-perfect trading success on markets with low odds," describing them as "statistically anomalous." Ultimately, the firm suspended Kaptur for two years and imposed a fine of just over $20,000, according to a notice.

In a separate case, 24-year-old California Republican candidate Kyle Langford violated company rules by wagering approximately $200 on his own candidacy and then promoting the bet on social media, Kalshi said. Langford was banned for five years and was fined just over $2,000. He is now running for a congressional seat.

Kalshi said it will continue to publicly disclose its cases and that it has reported cases to the Commodity Futures Trading Commission. Fines will go to a non-profit that educates consumers on derivatives markets, the firm said.

Prediction markets under the spotlight

Prediction markets like Polymarket and Kalshi have grown in popularity over the past year, especially during the 2024 election cycle, as they allowed people to use crypto wager on the outcomes of specific races, including who would be president.

Last month, lawmakers raised alarm bells after a Polymarket account wagered that Venezuelan President Maduro would be "out" by the end of this month, netting $400,000, sparking concerns of inside information. Democratic Rep. Ritchie Torres introduced a bill to ban federal elected officials, political appointees, and executive branch employees from making bets on prediction markets involving "government policy, government action or political outcome."

Kalshi CEO Tarek Mansour has expressed support for the bill and said that his company adopts insider trading regulations from the New York Stock Exchange and Nasdaq, barring users from trading if they have access to non-public information on a market.

"No system is perfect," the company said on Wednesday. "No financial exchange is immune from bad actors. Not stock exchanges, not banks, not prediction markets. We’re committed to deterring and finding the bad actors, manipulators, and those who willingly cheat."

In a statement, a spokesperson for Beast Industries said it has had a policy in place that bars employees from using proprietary company information and that it has "no tolerance for this behavior."

"With regard to this particular matter, we’ve already initiated an independent investigation as part of our overall ongoing efforts to ensure the integrity of our workplace and trust with our global audiences," the spokesperson said. "We welcome Kalshi - and hopefully others in the space - also taking this issue seriously, but it only works if they are willing to communicate their findings, so we’re hopeful they’ll be more open to that in the future."

Langford did not immediately respond to requests for comment.

Later on Wednesday, the CFTC released an advisory. Its chair Michael Selig said he was happy to see exchanges following the agency's rules as self-regulated organizations, in a post on X. 

"Let me be clear: if you attempt to engage in manipulation, fraud, or insider trading, we will find you and take action," he added.

Updated at 9:40 p.m. UTC  on Feb. 25 to include Selig's post 

Updated at 9:45 p.m. UTC  on Feb. 25 to include statement from Beast Industries