Kalshi CEO Tarek Mansour warned that insider trading on prediction markets will face federal prosecution. Speaking at Semafor World Economy, Mansour stated that trading on non-public information through platforms like Kalshi constitutes a federal crime that the US Department of Justice will eventually pursue. His comments come amid growing public concern about suspicious betting patterns on major prediction platforms.

Prediction markets have faced scrutiny after large, well-timed bets on public events raised red flags. The concern centers on traders with inside knowledge exploiting these markets for profit. For instance, someone aware of when SpaceX might announce its IPO or President Trump's travel plans could unfairly profit. Companies have been slow to implement preventive measures, Semafor reported.

Mansour emphasized that Kalshi supports banning insider trading entirely and has the authority to impose fines up to criminal prosecution. The platform has already released some cases and plans to pursue more. However, he acknowledged this creates a "chicken and the egg" situation where bad actors will always exist. The goal remains identifying and deterring these traders to maintain market integrity.