Kalshi has permanently blocked a user for the first time

[greysonz]

Kalshi has permanently blocked a user for the first time.

https://www.tradingview.com/news/the_block:87e69f97f094b:0-kalshi-issues-first-permanent-ban-to-former-rep-george-santos-over-state-of-the-union-trading/

He was former congressman George Santos. The platform claims that he traded in contracts for his own appearance at the president’s speech and then tried to influence their price through public statements.
Santos earned $17,839 from the transactions. Now he also faces a fine of $71,556.

Will there be anything related to Polymarket?
What do you think - will this become a widespread practice? If so, will prediction enthusiasts try to bypass them?

[stadus]

If they just block the user, will that really stop him from taking advantage of prediction markets? There is still Polymarket and other platforms, and he does not even need to place the bets himself. He could simply give the insider information to someone else and let them bet for him. As long as he still has access to that kind of information, there are still ways for him to make money from the system.

So if this is his punishment, for me it does not look strong enough. A platform ban only removes one account, it does not really remove the advantage he has from the insider information. And, this one...

In a notice of settlement of disciplinary action filed on Monday, Kalshi said Santos violated its rules by trading a bet on whether he would attend the State of the Union. He was then ordered to pay a fine of just over $71,000.

paying a fine will not stop him from doing it again.

[Ronsbit]

If they just block the user, will that really stop him from taking advantage of prediction markets? There is still Polymarket and other platforms, and he does not even need to place the bets himself. He could simply give the insider information to someone else and let them bet for him. As long as he still has access to that kind of information, there are still ways for him to make money from the system.

So if this is his punishment, for me it does not look strong enough. A platform ban only removes one account, it does not really remove the advantage he has from the insider information. And, this one...

In a notice of settlement of disciplinary action filed on Monday, Kalshi said Santos violated its rules by trading a bet on whether he would attend the State of the Union. He was then ordered to pay a fine of just over $71,000.

paying a fine will not stop him from doing it again.

You are right, even if they fine him, it's not a big deal as he can still bet through proxies with friend's and associates in the same business with him since he gets insider information to furnish them with. Maybe if the government is serious on punishing him, they should keep him away from sensitive information or office where he operates that guarantees him the information he gets to sell out in that manner. This can likely be the measures that could work out on him if implemented after him paying his fine. Aside him, there are still many  officials that does this same thing but I believe with time they all will be brought to book

[Charles-Tim]

Will there be anything related to Polymarket?
What do you think - will this become a widespread practice? If so, will prediction enthusiasts try to bypass them?

This has not changed the fact that insider betting can not be eliminated from the prediction markets. Only few are known, there are many that are not known to the public.

I do not have any findings or statistical report about it, but when something is occuring and reported, there are many more than are not known.

People will also get smart to avoid detection.

[rdluffy]

If they just block the user, will that really stop him from taking advantage of prediction markets? There is still Polymarket and other platforms, and he does not even need to place the bets himself. He could simply give the insider information to someone else and let them bet for him. As long as he still has access to that kind of information, there are still ways for him to make money from the system.

So if this is his punishment, for me it does not look strong enough. A platform ban only removes one account, it does not really remove the advantage he has from the insider information. And, this one...
...

I think Kalshi has to take these steps mainly because of U.S. market regulations
But I believe Polymarket could follow the same path if it wants to operate there without major complications, since it already has partial authorization in US

And that is precisely the biggest challenge I see in curbing insider trading
No matter who the person is, they can simply trade using a third party’s account or just pass on the information and split the profits
It’s extremely difficult to curb this tactic

[Asuspawer09]

If they just block the user, will that really stop him from taking advantage of prediction markets? There is still Polymarket and other platforms, and he does not even need to place the bets himself. He could simply give the insider information to someone else and let them bet for him. As long as he still has access to that kind of information, there are still ways for him to make money from the system.

So if this is his punishment, for me it does not look strong enough. A platform ban only removes one account, it does not really remove the advantage he has from the insider information. And, this one...

In a notice of settlement of disciplinary action filed on Monday, Kalshi said Santos violated its rules by trading a bet on whether he would attend the State of the Union. He was then ordered to pay a fine of just over $71,000.

paying a fine will not stop him from doing it again.

You are right, even if they fine him, it's not a big deal as he can still bet through proxies with friend's and associates in the same business with him since he gets insider information to furnish them with. Maybe if the government is serious on punishing him, they should keep him away from sensitive information or office where he operates that guarantees him the information he gets to sell out in that manner. This can likely be the measures that could work out on him if implemented after him paying his fine. Aside him, there are still many  officials that does this same thing but I believe with time they all will be brought to book

For sure, I mean, how did he get caught on that? Is he already using proxies? If he's already doing it for a long time for sure his already taking advantage of it.

I mean that is why this kind of prediction on Kalshiw as just absurb since it was just prone to cheating or getting taken advantage of, but I guess this doesn't matter for some gamblers, I mean if they are willing to do the bet, I guess it wouldn't matter because it's a bet anyway chances of losing was always high.

But the ban was just reasonable, for sure, for something like this, since this could go on for a long time if it wasn't stopped, so they sure need to do something still the platform was centralized so they could do anything.

[Cointxz]

Will there be anything related to Polymarket?
What do you think - will this become a widespread practice? If so, will prediction enthusiasts try to bypass them?

This has not changed the fact that insider betting can not be eliminated from the prediction markets. Only few are known, there are many that are not known to the public.

I do not have any findings or statistical report about it, but when something is occuring and reported, there are many more than are not known.

People will also get smart to avoid detection.

This is the cancer of prediction market that can’t be removed regardless of what method they will restrict someone on creating account because there’s a lot of ways to bypass it.

Insider knowledge is always problem on this prediction style game especially if they will involved a certain person decision making for the outcome of the bet.

It’s a billion dollar source of wealth coming from gullible gamblers that doesn’t care for manipulation on result. 

[X-ray]

What do you think - will this become a widespread practice? If so, will prediction enthusiasts try to bypass them?

It will not become a widespread practice. The ban for George Santos can easily by passed by going to the another platform. He can also use his family account to still trade on Kalshi. Who knows he also asked Trump to release the ban from Kalshi like when he got commutation from Trump.

I'd consider Kalshi's fight against insider trading is serious only if they ban all of accounts linked to the POTUS, whoever it is.

[Smartprofit]

Kalshi is a centralized prediction platform with a mandatory KYC procedure (which, by the way, demonstrates why KYC is absolutely evil). 🙋

Polymarket, unlike Kalshi, is a decentralized platform running on the Polygon blockchain. There's no KYC, so banning an insider is impossible. Even if your public wallet address is banned, who's to stop you from creating a new one in five seconds? A VPN will reliably hide your IP address. So, a ban like this on Polymarket is simply impossible.

Furthermore, in general, I'm not sure such platforms should fight insiders. It's stupid. In financial markets, people strive to determine the fair price of an asset. In prediction markets, people strive to determine the truth or falsity of a statement (event). And who can say whether an event is true or false? Only an insider. Yes, theoretically all insiders could be banned, but then who would determine the truth?  Therefore, I believe Kalshi's management is on a very slippery slope. I think there's a risk that the platform will soon completely lose its popularity if such bans are carried out on a mass scale. 🧑‍💻

[Ronsbit]

For sure, I mean, how did he get caught on that? Is he already using proxies? If he's already doing it for a long time for sure his already taking advantage of it.

I mean that is why this kind of prediction on Kalshiw as just absurb since it was just prone to cheating or getting taken advantage of, but I guess this doesn't matter for some gamblers, I mean if they are willing to do the bet, I guess it wouldn't matter because it's a bet anyway chances of losing was always high.

But the ban was just reasonable, for sure, for something like this, since this could go on for a long time if it wasn't stopped, so they sure need to do something still the platform was centralized so they could do anything.

Banning him with immediate effect was the best option and measures taken to protect the platform and users otherwise he would be taking advantage of the system at the detriment of the player's who might likely bet on his prediction not knowing or having knowledge that he is an insider who is taking advantage of his position as an official to enrich himself through proxies via the prediction market which is unprofessional, unethical and against standard policy and platform practices.

Kalshi being centralised made it possible for him to be caught because his information was with them but I am also curious to know how long he has been with the platform and how many possible prediction he has done before he was caught.

[YellowSwap]

This was fortunately what I was expecting to be happening to these people, but will this truly work completely? I don't think it will, because they can use someone's daughter or son to take the prediction.

If you want to talk about the funding that they use on bet they can slowly plan this for months before they carry out the mission, it's very possible that this ban won't work.

I just like the fact that they are finally taking actions, maybe later on they will find better solution to really restrict this people completely.

[PostQuantumBTC]

Kalshi is a centralized prediction platform with a mandatory KYC procedure (which, by the way, demonstrates why KYC is absolutely evil). 🙋

I like decentralization but it is better to say what is right at the right time and not at the wrong time. You just said what is right at the wrong time or you did not read what the former congressman George Santos did.

There is too much insider betting on prediction markets and which is very inappropriate. Some people will bet but few people will manipulate and earn the money of other the people.

[Merit.s]

No matter what Kalshi do to Mr George Santos, it wouldn't change anything or stop insiders from manipulating the market because they're hitting it big.

I don't think that, there's any way Prediction market can stop insiders manipulation because if you ban a user since, he knows he gat the information, he will give his friends to bet and they'll share the m2.

[Swordsoffreedom]

Will there be anything related to Polymarket?
What do you think - will this become a widespread practice? If so, will prediction enthusiasts try to bypass them?

We will likely see similar enforcement measure applied to Polymarket. Their current rules already state anyone holding position of authority capable of influencing outcome is prohibited from trading that specific contract. Practices such as use of insider information, self-dealing, front-running or market manipulation are also banned.

Imo, widespread enforcement is far more important than widespread ban. If they were to simply ban any trader who appear suspicious, it would conflict with open & permissionless nature of prediction market. Conversely, barring individual who actually possess power to influence outcome from trading is much more logical approach.

[Ndabagi01]

As this people are getting caught and being given mild punishment, others will still seek out for ways not to get caught. See the whopping amount he has made from being an insider to enrich himself, many people will be doing that and unless they’re caught are we going to know to the extent to which they’ve been engaging in that.

This will continue and it won’t stop, people will take advantage of it directly on indirectly to enrich themselves. They will only seek to have smarter means not to get exposed by the system.

[letteredhub]

paying a fine will not stop him from doing it again.

And what if this isn't the first time he's being doing it and getting away with it until this very time. I think anyone of that status would quietly pay the fine considering how much he may have benefited from previous. Giving a ban might be the best they could have done within their power and I think what should be done more is that other prediction market should corporate by also giving similar ban punishment.

[DanWalker]

will prediction enthusiasts try to bypass them?

You know, attempt to bypass system are inevitable. For instance, some people might use completely new account or new wallet. Some people could switch to different platform or trade by using proxy. I think Polymarket’s on chain transparency offer advantage in such case. Afaik, they could monitor publicly visible trading activity. Also they could take action such as banning wallet or referring case to law enforcement.

Another thing is ordinary trader might simply have outstanding information. On the other hand any insider might have confirmed capability to change outcome. Therefore border between these two scenario must be absolutely determined and consistently enforced. So, explaining this distinction will be their main challenge now if prediction market wish to grow.