Kalshi co-founder levels off-color remark at MrBeast employee caught for insider trading
Prediction markets are exploding in popularity as people rush to bet on real world events, from sports to elections to celebrity behavior. The platforms, however, have also tempted individuals to make a quick buck from insider information. The latest example came on Wednesday when Kalshi announced it had closed investigations into two cases of insider trading, including one that targeted a MrBeast employee named Artem Kaptur who made over $5,000 on bets related to YouTube streaming milestones.
The second investigation targeted a long-shot candidate for California governor in violation of Kalshi’s rules for politicians. In a salty tweet sharing news of the investigations, Kalshi co-founder Luana Lopes Lara, using a variation of a popular crude expression, said the pair “F***ed around, found out.”
Kalshi also suspended Kaptur for two years and imposed a penalty of $20,397.58, using a power granted by the Commodity and Futures Trading Commission for exchanges to impose fines on customers. In the case of the gubernatorial candidate, described as a Nazi sympathizer by a Catholic publication, Kalshi imposed a 5 year ban and a $2,246.36 fine.
Kalshi, which said it plans to donate the fines to a non-profit that provides education about derivatives, also announced it has opened 200 insider trading investigations in the past year, and frozen numerous accounts.
In the case of Kaptur, Kalshi explained it caught him due to “his near-perfect trading success on markets with low odds, which were statistically anomalous.” The company added that it had also received tips from other users on its platform, and found he had access to inside information as an editor of a MrBeast YouTube show. “Beast Industries has no tolerance for this behavior, whether by contestants or our own employees,” a spokesperson told the Wall Street Journal, but did not say if the editor was still employed.
All of this comes as there is growing public and political scrutiny of prediction markets, which proponents say provide important new insights into a range of current events, but which critics dismiss as gambling.
Kalshi’s announcement also comes as the company seeks to position itself as a responsible, compliance-focused alternative to its arch-rival Polymarket. The latter has come under scrutiny for a bet on its platform, placed by someone many suspect was a Pentagon insider, collect a big profit on the capture of Venezuelan dictator Nicolas Maduro. Meanwhile, a new report suggests an insider at KPMG has been using Polymarket to place bets on companies audited by the accounting giant.
This story was originally featured on Fortune.com