Key facts
- Kalshi is investigating suspicious trades related to the selection of Katie Zacharia as White House press secretary.
- The prediction market platform froze over $90,000 in profits for a customer.
- The customer allegedly used confidential information to bet on the exchange, profiting over $100,000.
- Kalshi alerted the CFTC to the trades, which are viewed as derivatives exchanges.
- The White House confirmed an employee involved was placed on unpaid administrative leave.
Prediction market Kalshi has initiated an investigation into a series of suspicious trades on its platform concerning the selection of Katie Zacharia as US President Donald Trump's new White House press secretary, according to The Wall Street Journal. Kalshi has frozen over $90,000 in profits from a customer's account, alleging the individual used confidential information to make more than $100,000 in bets.
The firm reported that its surveillance team flagged the anomalous trades in March and referred them to the Commodity Futures Trading Commission (CFTC), which considers such platforms as derivatives exchanges. Kalshi stated it has been cooperating with regulators and providing collected evidence.
When questioned about the investigation, White House Press Secretary Karoline Leavitt indicated that the employee involved had been placed on unpaid administrative leave, without naming the individual. She described the situation as "deeply unfortunate and frankly a disgrace."
Prediction markets like Kalshi allow users to trade on the outcomes of future events. Concerns about insider trading have intensified as these markets grow, with critics highlighting the potential for individuals to leverage privileged information. The White House had previously warned employees against using confidential information for such trades after a series of well-timed bets raised insider trading questions.