The numbers come first.
Kalshi, one of the largest federally regulated prediction-market platforms, has begun aggressively referring suspected insider-trading cases to the Commodity Futures Trading Commission (CFTC), the company told Fortune. The disclosures arrive at a moment when the Trump family is expanding its own footprint across the industry.
Two cases have already surfaced publicly.
Kalshi's surveillance systems flagged trades by former Congressman George Santos connected to markets tied to the State of the Union address. The company investigated, referred the matter to the CFTC with supporting evidence, and is pursuing its own enforcement action against Santos for violating exchange rules. Kalshi told Fortune it will work to reimburse affected traders if monetary penalties are recovered.
Federal authorities have also examined the activity of Gabriel Perez, a former White House teleprompter operator. Officials investigated whether Perez used advance knowledge of Trump's prepared remarks to trade on Kalshi markets tied to specific words or topics set to appear in presidential speeches.
The scale of the problem may be larger than two names suggest. Columbia Law professor Joshua Mitts and University of Haifa professor Moran Ofir wrote in a study that bets on prediction markets achieved a nearly 70% win rate — 'well in excess of chance' — estimating that traders earned $143 million in profit.
The platform's defenses are real but untested at scale.
'Being federally regulated means that Kalshi bans market manipulation, insider trading, has limits on the types of markets it lists… and publicly reports all trades to the CFTC daily,' Laura Frank, a Kalshi spokesperson, told Fortune. Users must complete identity verification before trading, and the company says its surveillance systems mirror those used in equity markets.
Not everyone agrees that insider trading in prediction markets is a problem. Robin Hanson, professor at George Mason University and a prediction-market pioneer, argues the opposite: insiders should trade, because 'the purpose of the market is to inform decisions,' he previously told Fortune.
Meanwhile, the Trump family is building the ecosystem around it.
Trump Media & Technology Group is developing TruthPredict, a prediction-market platform for contracts tied to major events. The company has also launched Truth API, a premium service giving Wall Street machine-readable access to Truth Social posts — including the president's own — potentially allowing subscribers to react to market-moving statements seconds before the general public sees them.
Donald Trump Jr. is a paid strategic advisor to Kalshi. His venture capital firm, 1789 Capital, invested in rival platform Polymarket, and Trump Jr. joined Polymarket's advisory board last year. That places the president's eldest son in a paid or advisory relationship with both of the industry's two largest platforms, while his father builds a third. There is no public evidence that Trump Jr. has used privileged government information to trade on either platform. Trump Jr.'s team and Trump Media & Technology Group did not respond to Fortune's request for comment.
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The architecture here is worth naming plainly. Presidential statements move markets. A Trump-backed service sells faster access to those statements. A Trump-backed platform is being built to let users wager on political outcomes. And the president's son sits on the boards of the two incumbents. None of that is illegal on its face — but it is precisely the kind of structural conflict that regulators and investors should be watching with clear eyes. Capital rewards clear rules. The CFTC's willingness to act on Kalshi's referrals will be the first real test of whether those rules mean anything in Washington's newest trading arena.
