Kalshi CEO Tarek Mansour argues that insider trading is a bigger threat in the traditional stock market than in prediction markets. In an interview published Sunday with lawyer Max Raskin, Mansour said conventional markets can reward vague information in “very
For Tarek Mansour, the question isn’t whether insider trading exists. It’s where it’s easier to hide.
In an interview published in the Washington Post on Sunday, the Kalshi CEO said insider trading “poses a bigger threat to the stock market than to prediction markets.” The distinction, he argued, comes down to how information travels—and how clearly it shows up when money is placed.
Mansour told lawyer Max Raskin that detecting insider trading in the traditional stock market is “much harder” than in prediction markets. In his description. the problem is that stock-market information can be broad and indirect: “you may have a piece of information. like a certain product is going to be released. and then you buy the stock. It’s very broad.”.
In prediction markets, his argument is that the incentive and the mechanics are tighter. The “bad actors. ” Mansour said. can have information such as “a certain product is going to be released. ” and then they place money on event contracts betting that the product will be released. That structure, he said, makes wrongdoing “very direct” and “very noiseless.”.
The comments land amid an investigation into Kalshi tied to former New York Rep. George Santos. Santos is under investigation by the Justice Department and the Commodity Futures Trading Commission after Kalshi flagged unusual trades connected to his attendance at the State of the Union address in February.
Kalshi’s CEO acknowledged the basic reality that fraud will never disappear. “there will be fraudsters in any system,” Mansour said, while adding that Kalshi is working to catch them “super fast.”
Prediction markets. as framed by Mansour and described in the interview. work through event contracts—people bet on outcomes of events ranging from pop culture to politics. Kalshi has introduced guardrails intended to limit insider trading concerns. including requiring traders to submit employment verification before trading and making it easy for whistleblowers to flag suspicious behavior.
But lawmakers remain unconvinced. Numerous lawmakers have slammed the markets and proposed bills to ban or limit their activities. Minnesota Gov. Tim Walz signed off on a statewide ban on the markets in May.
In the space between Kalshi’s guardrails and lawmakers’ pushback. Mansour is drawing a sharp line: if insider trading is harder to detect in one marketplace. it’s because the trading signals are foggier. If it’s easier to detect in another. it’s because the bets are more narrowly tied to the event itself.
Kalshi Tarek Mansour insider trading prediction markets George Santos Justice Department Commodity Futures Trading Commission State of the Union Tim Walz Minnesota ban event contracts