Kalshi has fined an employee of MrBeast $20,000 and barred him from the platform for two years after accusing them of insider trading.
The prediction market business investigated the employee, identified as Artem Kaptur, who made several correct trades on the outcomes of MrBeasts’s YouTube videos. Mr Kaptur has also been reported to federal employees.
Trades totaling more than $4,000
Mr Kaptur made trades of $4,000 in total, according to Kalshi, profiting more than $5,400 in the process. However, his account was frozen before he could withdraw the winnings.
Robert J. DeNault, Kalshi’s head of enforcement and legal counsel, highlighted the case on LinkedIn. In a post, he confirmed: “We investigated and found this trader was employed as an editor for the streamer’s show likely with access to material non-public information connected to his trading,
“We’ve reported these cases to the Commodity Futures Trading Commission (CFTC), as we are required to do, and Kalshi will be donating fines imposed to a non-profit that provides consumer education on derivatives markets.”
Insider trading can carry steep criminal and civil penalties. In the United States, cases are pursued by the U.S. Securities and Exchange Commission (SEC) and the U.S. Department of Justice, with individuals facing up to 20 years in prison and fines of up to $5 million, along with potential civil penalties of up to three times any illicit gains. It is not thought Me Kaptur will face that level of punishment.
Beast Industries launches independent investigation
As reported in the New York Times, the employee also faces disciplinary action from Beast Industries, the company created by Jimmy Donaldson, who is also known as MrBeast.
In a statement, a spokesperson said: “Beast Industries has no tolerance for this behavior, whether by contestants or our own employees. We have a longstanding policy in place against employees using proprietary company information which safeguards the highest standards and ethics throughout our organization, They added the investigation was to “to ensure the integrity of our workplace and trust with our global audiences.”
MrBeast, whose real name is Jimmy Donaldson, is one of the world’s most influential online creators, known for elaborate challenge videos and record-breaking cash giveaways. The 26-year-old YouTuber has built a vast digital empire spanning philanthropy, consumer products and media ventures, amassing hundreds of millions of subscribers across platforms.
His high-budget productions and business expansions have made him a dominant force in the creator economy and a prominent figure in global entertainment.
Democratic donor blocked from trading on California governor race
Kalshi has also taken steps to block Stephen Cloobeck, a major Democratic donor and friend of hopeful Eric Swalwell, who had attempted to trade the outcome of his election over the past weekend. Kalshi spokesperson, Elisabeth Diana, said that ““politicians are prohibited from trading on their own elections”, when she was pressed for comment.
Cloobeck told POLITICO he had previously been able to wager on his own campaign months earlier without facing similar restrictions. He confirmed attempting the recent bets and shared screenshots showing efforts to place about $1,000 on Rep. Eric Swalwell’s victory and $2,000 on the defeat of San Jose Mayor Matt Mahan.
Neither trade was completed, and screenshots show the platform informed him that he was “currently restricted from trading this market.” Cloobeck said he contacted Kalshi seeking an explanation and has not yet received a response.
The episode comes as prediction market activity accelerates in the California governor’s race, with more than $3 million wagered so far on Kalshi in the crowded contest. At last weekend’s Democratic state convention, several candidates told POLITICO the surge raises fresh concerns, including the risks of insider trading and undue influence on the democratic process.
Prediction markets face headwinds as insider trading continues
Despite rapid growth, prediction markets continue to face headwinds as questions mount over insider access and market integrity. High-profile episodes, including trading tied to Venezuelan President Nicolás Maduro during periods of political turmoil, have fueled scrutiny over whether participants with privileged information can profit ahead of public developments.
Regulators have long warned that event-based contracts, particularly those tied to politics or corporate outcomes, may be vulnerable to manipulation or informational advantages. In the United States, oversight falls to the CFTC, which has previously clashed with platforms over the scope and legality of political event trading.
Supporters argue prediction markets improve price discovery and transparency, but critics counter that thin liquidity and opaque participants can amplify the risk of insider trading. Each new controversy, from creator-linked contracts to election wagers, renews debate over whether such markets can scale without stricter safeguards.
As platforms like Kalshi expand into higher-profile events, the industry’s long-term viability may hinge on its ability to police misconduct and reassure regulators that speculation does not undermine public trust in democratic or market processes.
