Kalshi has permanently blocked a user for the first time

[Alex077]

It’s no surprise that George Santos is involved in yet another ethics scandal. After Trump commuted his sentence and let him get out of prison, he must feel like he can get away with anything. Unfortunately for him, Kalshi requires everyone to do KYC. I know people can try to use fake information, but Santos is a very dumb criminal and probably didn’t try to hide what he was doing...

I think the problem here goes even further than just KYC. Prediction markets are really becoming more and more like financial markets, and the more money and liquidity there is, the stronger the temptation will be to use insider information or even try to directly influence the outcome of an event for profit.

So most likely, as prediction markets continue to grow, regulation will become stricter anyway. And the main issue won’t be just identifying users, but also having rules against insider trading and market manipulation. When tens or even hundreds of millions of dollars start moving through individual events, relying only on platform fees and the honesty of participants is clearly no longer enough.

[stadus]

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

This is the point where he probably would not even mind if his salary is not that big, because the information he gets can be more valuable. He can use that information to bet a lot of money on any prediction market he chooses.

Now that he already got caught and was only required to pay, I doubt he will make the same stupid mistake again. Others will also learn from his mistake and become more careful.

They are making money because they already know something that ordinary bettors don't. Then we wonder why we are losing. For me, that is really not fair.

[Zlantann]

I think the problem here goes even further than just KYC. Prediction markets are really becoming more and more like financial markets, and the more money and liquidity there is, the stronger the temptation will be to use insider information or even try to directly influence the outcome of an event for profit.

So most likely, as prediction markets continue to grow, regulation will become stricter anyway. And the main issue won’t be just identifying users, but also having rules against insider trading and market manipulation. When tens or even hundreds of millions of dollars start moving through individual events, relying only on platform fees and the honesty of participants is clearly no longer enough.

There is a thread reserved to document and discuss new regulations regarding prediction markets in different countries. More countries are becoming stricter on these prediction markets. The problem they have is that they want to offer gambling-related services, yet they don't want to be licensed under the respective gambling laws.

As more people keep taking advantage of their loopholes, more countries will be forced to make stringent laws to control them. The US has some draft bills that seek to bar government officials and their family members from using some gambling platforms.

[Kelward]

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.

Insider information has become a big dent in the prediction market, Santos, is just one of many insiders that trades on the information that they are privileged to know their outcomes, even if Santos, were banned in other prediction platforms it doesn't stop him from supplying information to others. So far he still occupys positions of knowing sensitive information that he can share and get his cut, a mere fine wouldn't be enough to deter him from his manipulations.

Insider trading is a very big problem that prediction sites and governments in regions that they are allowed to operate should look into, I think that the least that they can do is to mandate governments to decisively deal with insider informants who are caught as a deterrent to others that are not yet caught because I don't see how these insider trading can totally be eradicated.

[Elainebue]

I think this will become more common if people try to trade on events they are directly involved in. It makes sense for Kalshi to block this kind of trading since it can affect trust in the platform. The interesting part is how they will deal with people who try to get around the rules.

[Don Pedro Dinero]

I think this will become more common if people try to trade on events they are directly involved in. It makes sense for Kalshi to block this kind of trading since it can affect trust in the platform. The interesting part is how they will deal with people who try to get around the rules.

That's what they mentioned earlier. You can ban someone, but that person could be using front men—even though they'd be breaking the rules and risking a penalty at the very least. This whole prediction market thing is a bit of a mess, given the possibility that an insider might place bets or do so through front men, but some rules have to be put in place. Personally, I don't bet on them; I prefer the traditional ones.

[purple_sparkles]

I think this will become more common if people try to trade on events they are directly involved in. It makes sense for Kalshi to block this kind of trading since it can affect trust in the platform. The interesting part is how they will deal with people who try to get around the rules.

That's what they mentioned earlier. You can ban someone, but that person could be using front men—even though they'd be breaking the rules and risking a penalty at the very least. This whole prediction market thing is a bit of a mess, given the possibility that an insider might place bets or do so through front men, but some rules have to be put in place. Personally, I don't bet on them; I prefer the traditional ones.

I think that over time we will see various rules becoming stricter and more account restrictions and blocks being introduced. Otherwise, it would be impossible to regulate an industry where there is complete permissiveness and a lack of accountability. In my opinion, this is logical. If no measures are taken in response to certain violations, sooner or later people will start refusing to use these services because they will see a lack of transparency and a greater potential for fraud.

[MoatGoat]

100% already on polymarket, and even somewhat proven,  Big money coming in does not clean up the part of prediction markets that actually burned
people. The WSJ dug into Polymarket's influencer marketing and found promoters showing off
roughly 900K dollars in "winnings" that were filmed on a password protected fake clone of the
site. The same bets placed on the real platform would have lost about 166K. They were paid a
couple thousand a month and told to keep the sponsorship quiet.

To be fair to Polymarket, that is faked marketing, not rigged markets. The order books and
resolutions were not the problem there. But it is the same lesson as every crypto casino
thread on this board: screenshots and influencer wins are worthless as evidence. If a claim
about money moving cannot be checked on chain or in a public record, treat it as an ad.

[Dr.Bitcoin_Strange]

There was an article I read about Kelshi, which says they want to start demanding for some job information from their customer before the person will be allowed to use the platform, probably that their strategy plus other strategy they have employed is helping them detect and block those inside traders, however there are some of them that will still go undetected probably because they are using someone else to place the bet. I have said it before that the only way to completely eliminate insider trading is to stop listing those kinds of events that can be taken advantage of by insiders.

[YOSHIE]

Kalshi has permanently blocked a user for the first time.

In essence, the Kalshi prediction market has a strong case for blocking US Congressman George Santos.
If this is the reason for blocking the former US Congressman.

• Market Manipulation: George Santos was accused of betting on his own performance in President Donald Trump's State of the Union address.
• False Statements: He made false claims on social media to profit from his bets and made nearly $18,000.
• Additional Sanctions: Santos was also fined $71,356 for these acts of market manipulation.

If I were the owner of the Kalshi prediction market, I would do the same thing, as Kalshi did.

As far as I know, this is not the first thing that has been done by the Kalshi prediction market, the prediction market also initially carried out suspension sanctions against political candidates, The situation carried out by the Kalshi prediction market platform is a firm and good action to ensure the Platform gets full support from its users, meaning there is no favoritism, wrongdoing will still be dealt with according to applicable law, meaning Kalshi is responsible.

[Yorubek]

I think this will become more common if people try to trade on events they are directly involved in. It makes sense for Kalshi to block this kind of trading since it can affect trust in the platform. The interesting part is how they will deal with people who try to get around the rules.

That's what they mentioned earlier. You can ban someone, but that person could be using front men—even though they'd be breaking the rules and risking a penalty at the very least. This whole prediction market thing is a bit of a mess, given the possibility that an insider might place bets or do so through front men, but some rules have to be put in place. Personally, I don't bet on them; I prefer the traditional ones.

I think that over time we will see various rules becoming stricter and more account restrictions and blocks being introduced. Otherwise, it would be impossible to regulate an industry where there is complete permissiveness and a lack of accountability. In my opinion, this is logical. If no measures are taken in response to certain violations, sooner or later people will start refusing to use these services because they will see a lack of transparency and a greater potential for fraud.

I think it is very important to take strict measures if necessary to maintain people's trust in the prediction market and to reduce fraud. If someone has to be permanently blocked to reduce fraud, then it is certainly logical. Greed completely blinds people, as a result of which people associate themselves with all kinds of evil deeds. Perhaps the rules and regulations of the prediction market will be stricter than before to curb fraud so that the common people do not fall prey to fraud and so that such incidents do not happen again in the future. It is very important to make the rules and regulations of the prediction market stricter.

[coin-investor]

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

This is useless; how can you block inside information that can manipulate the results? Kalshi has overlooked the dummy-account issue that lets people get inside information on their platform; it's hard to weed out bad actors or players on Kalshi. They should have a way to do that, but unfortunately it's hard because you'll never know how players obtain the information.
They can block as many users as they want, but they cannot stop people from manipulating the platform.

[Nwada001]

Since they have the advantage of being the official partner of the US Open, I believe Kalshi was attempting to safeguard their reputation by learning from PolyMarket's mistakes. They will undoubtedly take every precaution to ensure that their brand receives the necessary exposure rather than being overshadowed by PolyMarket. However, given the unfavorable opinions people have of their ^(PolyMarket) service, it remains to be seen if PolyMarket will follow suit

Kalshi and Polymarket are suffering the same thing, which is insider trading. It's hard for them to stop it all unless they limit the type of event they will make available, which has the possibility of people inside taking advantage of information they have that’s not yet available in public. Kalshi permanently banned the senator from using their market, but that won’t prevent him from participating based on what other members in this thread have outlined.

[Smartprofit]

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.

I don't know exactly what former Congressman George Santos did... I haven't read about it... But in my opinion, it's not that important! 🙋

I'm a pragmatist, not a moralist. Yes, I try to adhere to certain moral and ethical standards myself, but that's my personal choice. I don't demand the same of others. In my observations, most politicians act unethically. I categorically cannot forgive only those of their actions that resulted in human casualties. When I hear about something else, something less horrific, I just shrug. 🙆

From a pragmatic perspective, prediction platforms are markets where the truth of a given event is determined. In our world, where lies and falsifications flourish, such platforms are simply necessary! In my opinion, they perform an important social function.

At the same time, I disagree with the thesis that the actions of insiders harm ordinary players.  From my own experience, I know that in perfectly competitive markets, the average player can't win anything. It's the presence of manipulators, big players, and insiders that gives the average player a chance to win a bet. Yes, it's difficult, but in principle, possible. In perfectly competitive markets, winning in the long run is fundamentally impossible. 💁

[Unsoldier]

I think this will become more common if people try to trade on events they are directly involved in. It makes sense for Kalshi to block this kind of trading since it can affect trust in the platform. The interesting part is how they will deal with people who try to get around the rules.

That's what they mentioned earlier. You can ban someone, but that person could be using front men—even though they'd be breaking the rules and risking a penalty at the very least. This whole prediction market thing is a bit of a mess, given the possibility that an insider might place bets or do so through front men, but some rules have to be put in place. Personally, I don't bet on them; I prefer the traditional ones.

The story of the first lifetime ban on Kalshi just shows that even when rules are in place, people will always find ways to bypass them. And when insiders are involved, it becomes completely unclear how fairly other participants can compete with them. Overall, rules for prediction markets are certainly necessary, though I have no doubt that people will try to bypass them as well.

[PostQuantumBTC]

I don't know exactly what former Congressman George Santos did... I haven't read about it... But in my opinion, it's not that important! 🙋

George Santos bet on whether he is going to attend President Donald Trump State of the Union address and he used it to win $17839 in profit.

It is like I bet on if I am going to do something, knowing that I will do it. Used the information to earn money from other people. That is more than insider betting.

What he did was very wrong.

[Antotena]

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.

This might just be post actions to prove that they are against insider trading but if they properly scrutinize that platform, the legit predictors on it might not be less than 30%, majority of the numbers are a insider traders because tell me why anyone will take mullions to predict awkward event that the world is interested in and they have millions in payoit and the rest of the people walk home with nothing, they have informations the public know nothing about.

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.

You know what I think this will unlock, it's another awareness for people that does not care before. This account that was banned will make other insider traders to improve ways to become hard to find. If they actually banned a person, I think the best they can do is to keep the information within the company, revealing it exposed the underground work they are doing and it will only make it more difficult to find more accounts that are cheating other people.

[blomen]

prediction markets still haven't gained full legal standing. these are just the cases that make the news, who knows how much money is being stolen by insiders? this must be a profitable venture, because even when people get caught, they keep doing it. moreover, there really is no way to stop it. as long as prediction markets exist, anyone can make predictions and risk their money, fully aware of the risks involved.

[Chibit01]

I think this will become more common if people try to trade on events they are directly involved in. It makes sense for Kalshi to block this kind of trading since it can affect trust in the platform. The interesting part is how they will deal with people who try to get around the rules.

It's almost impossible to catch those who are getting around behind the rules, but there is nothing better than having clear rules which prohibit a set of people from using the market. The next option, which will also enhance how active it can be to stop all this, is if employees take it upon themselves to put a strict rule on how their employers can't use the information they get from their source and jail term should also be associated with the punishment for anyone breaking the rules that way it can be easier spread fear in life of this insider traders.