Kalshi and Polymarket restrict trading after insider betting cases

7 articles · Updated · Fortune · Apr 26

A U.S. Army soldier was charged with five felonies for using classified intelligence to bet $33,000 on Polymarket, cashing out $400,000, while Kalshi fined and suspended three federal candidates for insider trading.
Both platforms now prohibit politicians from betting on their own campaigns, athletes on their leagues, and employees on employer-related contracts, responding to mounting regulatory and public pressure.
Debate continues over the role of insiders in prediction markets, with some experts arguing insider trading improves accuracy, while policymakers push for stricter rules to prevent operational risks and potential exploitation.

Can markets ever be fair when insiders can legally trade on secret information?

Are prediction markets a tool for truth or a new frontier for espionage?

How can regulators police a global market where users can be anonymous?

Does turning every future event into a bet devalue ethical decision-making?

When classified secrets become commodities, what is the cost to national security?