Kalshi Suspends Three Congressional Candidates for Insider Trading

^{Kalshi's prohibition on insider trading was put to the test this week, with three Congressional candidates facing charges for doing exactly that. (Photo: Allison Robbert / AP)} 

Kalshi announced Wednesday that it had suspended and fined three candidates for Congressional offices after finding that they had traded contracts related to their own races.

The company said in a statement that all three candidates had been suspended for five years and fined in accordance with the size and nature of their trades.

Kalshi Credits New Safeguards for Insider Trading Detection

The three candidates came from different races and different parties. Ezekiel Enriquez ran in the Republican primary for the 21^st Congressional district in Texas and State Sen. Matt Klein (D-Mendota Heights) is running in the Democratic primary for Minnesota's 2^nd Congressional District. Mark Moran is currently seeking a Senate seat in Virginia as an independent after previously running in the Democratic primary for that seat.

“All three cases concern political insider trading and were flagged because of our newly released safeguards to block political candidates from trading on their own elections,” Kalshi wrote in a statement. “Just like in traditional financial markets, bad actors will try to cheat. Regulated exchanges must constantly evolve and adapt their systems to address insider threats.”

While the initial announcement named only the races in which the candidates participated, the candidates themselves were identified in regulatory notices of disciplinary action.

In Klein's case, Kalshi said he “had traded a small amount on the outcome of his own election.” Klein was identified and confirmed as the account holder, after which he acknowledged the rule violation and negotiated a settlement. He agreed to pay a $539.85 fine and accepted a five-year ban from Kalshi.

Similarly, Enriquez was said to have “traded a slightly larger amount on the outcome of his own election…but still fairly small.” After being detected trying to trade on his own election, Enriquez cooperated with the investigation and agreed to pay a fine of $784.20 along with accepting his suspension.

Moran: ‘This Company is Destroying Young Men’

The third case played out differently. According to Kalshi, Moran traded on two different markets related to his campaign. First, he placed a trade on a market on whether he would run for public office in 2026 and later traded on his own candidacy in the Democratic Primary.

After Kalshi determined that Moran had made both trades and violated site rules, the company contacted him. He acknowledged the rule violations, but later ceased communication with Kalshi and did not work with the company to reach a settlement. Kalshi ultimately fined Moran $6,229.30, the largest penalty of the three

Moran wrote on X that his trades were part of an effort to raise awareness of the dangers of prediction markets.

The suspensions come as Kalshi and other prediction markets are dealing with increased scrutiny over insider trading. These platforms are also facing pushback from state regulators that say sports-based contracts are essentially allowing sites to operate as unlicensed sportsbooks, with Congress also considering taking action to rein in the industry.