Kalshi Backs Torres Bill as Prediction Markets Face Oversight

Tarek Mansour, CEO of U.S.-regulated prediction market platform Kalshi, has publicly endorsed a proposed congressional bill aimed at banning insider trading on prediction markets, emphasizing that Kalshi already enforces such rules as part of its regulatory framework.

In a detailed, public LinkedIn post published Wednesday, Mansour expressed support for legislation being introduced by the U.S. Representative Ritchie Torres, while also pushing back against what he described as growing confusion between regulated American platforms and unregulated offshore prediction markets.

“Kalshi is supportive of the bill Ritchie Torres is looking to introduce to affirm the ban on insider trading on prediction markets. Why? Because we already implement it.”

The bill: Public integrity in financial prediction markets act of 2026

Earlier this week, New York Congressman Ritchie Torres moved to formally address concerns around insider activity in prediction markets by introducing the Public Integrity in Financial Prediction Markets Act of 2026. The proposal would prevent federal lawmakers, political appointees, and executive branch officials from placing bets on prediction markets linked to government decisions, policy actions, or political events.

The timing of the bill is closely tied to growing unease within the industry. In recent weeks, reports emerged that a trader on the decentralized prediction platform Polymarket allegedly pocketed close to $400,000 after wagering on the removal of Venezuelan President Nicolás Maduro before the outcome was publicly known. 

The episode has raised uncomfortable questions about whether access to confidential or early information is being leveraged for profit in loosely regulated markets.

While the reported incident involves an offshore, decentralized platform, the fallout has not remained contained. The controversy has spilled over into the wider prediction market ecosystem, prompting renewed debate over market integrity, regulatory gaps, and whether current safeguards are sufficient to prevent misuse of privileged information.

Kalshi distances itself from offshore platforms

In his post, Mansour sought to clearly separate Kalshi from platforms accused of enabling insider trading, without naming any specific companies.

“This should be obvious, but some recent reporting has been conflating regulated prediction markets with unregulated, offshore prediction markets. What non-American, unregulated platforms do has no relationship to what regulated, American platforms do.”

He argued that treating all prediction markets as a single category risks misleading the public and regulators alike, especially as the sector continues to evolve.

“In nascent industries, the difference between regulated and unregulated players can get lost in the noise.”

To illustrate the point, Mansour drew comparisons to other financial sectors where regulation has historically separated legitimate exchanges from high-risk operators.

“Robinhood vs NoBrokerLicenseBuyStocksdotcom, Coinbase vs OffshoreTradeCryptoThingdotcom, Nasdaq vs BuyFOREXHereButOnlyAcceptWiresdotcom.”

Insider trading rules modeled on the NYSE and the Nasdaq

Mansour emphasized that Kalshi operates as a federally regulated exchange and has enforced insider trading prohibitions since its inception. According to him, Kalshi’s rules are directly adapted from those used by major U.S. stock exchanges.

“Our insider trading rules are adapted from the rules on NYSE and Nasdaq: if you have material non-public information on a market, you cannot trade it and if you do, you are committing a financial crime.”

He added that these restrictions apply broadly, including to government employees, policymakers, executives, and any individuals who possess information that is legally required to remain confidential.

Kalshi, which is regulated by the U.S. Commodity Futures Trading Commission (CFTC), delayed its public launch for several years until it secured regulatory approval — a decision Mansour framed as foundational to the company’s identity.

“From day one, we firmly believed in the regulatory first approach because it is the right thing to do.”

A key limitation of the proposed law

While backing Torres’ bill, Mansour also highlighted what he sees as a critical limitation: its jurisdiction.

“However, it’s important to emphasize that this American bill only applies to regulated, American companies and not to unregulated, non-American companies, which is where the alleged issues are occurring.”

This distinction underscores a broader challenge facing U.S. regulators — enforcing standards in a global, internet-native market where offshore platforms remain accessible to American users and lacking U.S. oversight.

Why this matters for the prediction market industry

The debate comes at a time when prediction markets are stepping out of niche corners and into a wider public view, increasingly used to gauge outcomes around elections, geopolitics, and major economic developments. Advocates see them as useful tools for capturing collective insight, while critics caution that, without strong guardrails, these markets can reward questionable or unethical behavior.

Mansour’s remarks highlight a clear split taking shape within the industry itself — between regulated platforms that are trying to build credibility by playing within the rules, and offshore operators that function beyond the reach of standard regulatory oversight.

“Prediction markets, like any industry, are not a monolith: there are important distinctions that matter.”

As lawmakers debate how far regulation should extend, Kalshi’s public alignment with stricter rules may help position regulated prediction markets as a legitimate financial instrument — while leaving unresolved questions about how governments should deal with unregulated platforms operating beyond their reach.

Also Read: Polymarket Trader Cashes In on Israel–Iran Strike Bets

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